Advantages and Disadvantages of Mixed Economy

Mixed economy as the name suggests is an economy where all the activities related to production and other activities are carried out by participation of both government and private enterprises. Given below are some of the advantages and disadvantages of mixed economy โ€“

Advantages of Mixed Economy

  1. Since this economy involves both government and private enterprises it has the advantage of taking the benefits of capitalist nature of private companies and socialist nature of government.
  2. There is less inequality of income because intent of government is to have a balanced economic growth of an economy.
  3. It allows individuals to run their business and make profits but at the same time it places some responsibility on these companies by inducing them to contribute towards the welfare of society.

Disadvantages of Mixed Economy

  1. Since welfare of society is important in a mixed economy it leads to lower than optimum use of the resources because government mobilize the resources towards the production of those goods and services which are beneficial for the society as a whole rather than producing those goods and services which in economic terms are more beneficial for an economy.
  2. Under this economy private enterprises have to face lot of difficulty because of various government loopholes like favoritism and bureaucratic nature which is prevalent in mixed economy.
  3. Under this economy the gap between the rich and poor is quite substantial as private entities are allowed in almost every sector of the economy which sometimes lead to few people accumulating huge sums of money while majority of people are living a miserable life leading to frustration in the minds of the people of the country.

As one can see that this economy like socialist and capitalist economies has both advantages and disadvantages and therefore it will be always debatable whether a country should follow mixed economy structure or not.

50 comments… add one
  • lewam

    thanks for your fruit full clarification on the adv. and disadv. of mixed economy. please add any more tip

    • Vinish Parikh

      Thanks lewam for your comments, let me know what else you are looking forward for I will add it.

    • Sarah

      very helpful.. few people do great helps like this

  • tumuhimbise scovia

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    • Vinish Parikh

      Hey Tumuimbise,

      Nice to see your comments I will try my level best to keep up the good post.

  • Birungi Allen

    Thanks for helping us with clear notice.
    May God bless you

    • Vinish Parikh

      Thanks Alot

  • Aron philemon

    da! I appriciate 4ur good ideals keep on going.

    • Vinish Parikh

      Thanks Aron

  • seher

    Thanks! it is really helpfull ……..

    • Vinish Parikh

      Wecome seher.

  • Skanda Sharma

    This was very helpful to me because i had a project which i had to collect all these but it was not given in our text book ..It is very helpful…

    • Vinish Parikh

      Thanks Skanda, I am glad it helped you.

  • Malaba, Mary

    Thank you very much for your direct and beautful notes .God bless you!

  • michael

    Thanks, it was helpful for my geography work, my book doesnt have any information like this. God bless.

    • Vinish Parikh

      Thanks, my endeavor is to give unique points to my visitors and i am happy to hear that you got information from this website which you could not found out in your textbook

  • I have benefited so much keep up helping scholars.

  • bryan

    thank so much

    • Vinish Parikh

      Welcome bryan.

  • Willy-nilly

    Thanks for posting it, it really satisfied my knowledge on mixed economy. KEEP UP THE GOOD WORK!

    • Vinish Parikh

      Welcome Willy-Nilly.

  • bulelwa

    plz make it more simple becoz i dont understand this also for kidz like me wen doing ems projects plz plz plz plz plz make it understanding

    • Vinish Parikh

      Hi Bulelwa,

      Let me know which part you did not understand I will make it more easier for you.

  • Tanishtha

    These notes really helped me a lot

    • Vinish Parikh

      Thanks Tanishtha.



    • Vinish Parikh

      Wecome Anu.

  • Anshul Dogra

    Thanks u This info. Is to much help full to me as well as other i appriciate you for this work add more info. and help us thanks ๐Ÿ™‚

    • Vinish Parikh

      Hi Anshul,

      Let me know what else you are looking forward for I will write on it.

  • ashwin n jain

    it’s really helpful thanks a lot

    • Vinish Parikh

      Thanks ashwin for your comments.

  • Anand Mavadiya

    Thanks ๐Ÿ™‚

    • Vinish Parikh


  • abdullah lashari

    useful information,bcoz it is not included in our syllabus.

    • Vinish Parikh

      Hi Abdullah,

      Thanks for the comments let me know what else is not covered in your syllabus I will try to write on it.

  • Alituha moses

    I dedicate mi bachelors 2u.If it wasnt ur great work here,i wdnt ve attained mi first class.Thank u very much.Mi wish is to meet u b4 i die n thank u physically.God keep u alive

    • Vinish Parikh

      Thanks, I am so happy to hear that you got your bachelors degree because of my website. My goal behind this site was this only to help people in every possible way.

  • Jyeajesie

    Just a new student on Business. Your answer seems better than other as it’s easy to understand. Thanks.

  • Onur Ozturk

    Awesome informationt, this will help me a alot in my Pre-DP economics. Thanks.

  • Ross

    Thanks this helped a lot!!!!!!!

  • khushi purohit

    please wl u help question is,distinguish between centraly planed economy and a market economy

    • Vinish Parikh

      Yes i am happy to help you, in order to know difference between planned and market economy you should read these two articles – Planned economy and market economy

  • sara shahira

    A lot of thanks for an information which is not in my textbook. Great explanation up there but if you could also add a very simple point each explanation will be much helper. So that I don’t have to explain again into very simple point for each to others when I ask them to search this web. Just give an opinion. Sorry and thanks.

  • Abeline

    thank you so much this have been very helpful to me because me too didn’t have this in my text book, keep it up. may god bless you
    sara shahira is right ๐Ÿ˜‰
    thanks a lot again

  • Kavuma Ritah

    You helped on my assignment, thanks dear

  • Rahma Amour

    Thank u so much this have been a great explanation,may god bless uu

  • courts

    Short and precise
    I like it
    thumbs up

  • Virginia Andreas

    You are my inspiration… Thank you very much for clarifying the advantages and disadvantages between all the economic systems. They are really helpful and I am so glad that they pulled me off the mud that I was stuck into. May the almighty give you more knowledge. Thumbs up

  • fuggie

    thank you very much I am very greatful but please use examples because this things really help us students with projects

  • Rhiannon

    In 10th grade and had a discussion question on this and it wasn’t in my book. Thanks much for the help.

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