Canada is one of the countries that use command economy. The government makes the core decisions on resource allocation for factors of production such as oil, capital, and labor. Prices are also under control by the same body. The nation is also an example of a country that uses free market economies because the law of demand and supply regulates factors of production rather than the central government. Lastly, Canada practices use of mixed economies because the government provides employment standards maintenance, protection of the environment, competition support, and a standardized welfare system.
China is among the countries that shifted from use of planned economy to market economy. The impact of this type of economic system is that it promotes production as well as the sale of products and services with no control or limited involvement of government agencies. Prices are dictated by consumer demand and product supply. The government does not enforce control of prices.
Unions are used in every household and restaurants across the globe. If the supply of onions decreases, prices in the market for the product skyrocket. Due to increased prices, farmers will increase production of the product to take advantage of the product. However, it will reach a point where supply is higher than demand forcing prices to drop. Price decreases will force farmers to lower growing unions forcing supply to drop to the level where it equals demand. At this point, the supply and demand of unions will be at equilibrium and equilibrium prices will prevail in the market (Prasch).
Onions is an example of a product under perfect competition. There are many buyers and sellers of the commodity in the market. Electricity is a product in Canada under pure monopoly. There are not close substitutes for the product, and the producing company is the price maker. Banking services in the country fall under monopolistic competition because there are a lot of banking institutions in the country, and each only has a small proportion of the total market. Tile products operate under oligopolistic markets because few firms are making the product and entry of other companies to the production of the product is hard.
Work cited
Prasch, Robert E. How Markets Work. Cheltenham, UK: Edward Elgar, 2008. Print.
