How does a planned economy answer these question:?

Question

1.) What to produce?

2.) How much to produce?

3.) For whom to produce?

Answer 1

Easy...  Planned economies make those determinations based on political requirements, "not" market requirements.

A Government Official who rules over the production of Orange Juice doesn't care about anything other than making sure the people get OJ for pennies on the dollar to insure the political magic show of the current administration. Never mind the market or that farmers have stopped growing Oranges because its no longer profitable and shortages reign supreme. As long as the Govt can claim they are providing cheap OJ to the people, they are happy.

Case and Point, Venezuela:

Shortages become a way of life in Venezuela

By Hal Weitzman in Caracas

Ysacar Morales and her stepfather Daniel are sitting on the front step of their house in San José Cotiza, a poor neighbourhood in central Caracas, reminiscing about beef and black beans.

“There hasn’t been meat in the shops since February,” says Ysacar, 15. “And the beans disappeared a couple of weeks ago.”

Shortages of such staples are a symptom of an economy distorted by foreign exchange restrictions, price controls and subsidies.