A mixed economy combines features of market and planned systems.
– Private ownership, profit motive and markets operate as well as government ownership, service provision and market intervention.
– The balance between the two varies between time and place.
– A mixed system should benefit from the advantages of the two systems. The market system should provide incentive and efficiency while equity and market failure should be dealt with by the government.
– However a mixed economy may suffer from the disadvantages of both alternatives producing inequality, inefficiency and low levels of welfare.