What is difference between market economy and centerally planned economy?

Question

What is difference between market economy and centerally planned economy?

Answer 1

A centrally planned economy is where a governing body determines how much of a particular good or service will be produced. This often leads to shortages or surpluses. This was often the cause of bread lines in Soviet Russia

A market economy on the other hand produces goods and service based on customer(market) demand for them.

Answer 2

A centrally planned economy is an economy where the State decides solely on what to produce.

A Market Economy revolves around competition by firms and firms base their products on what consumers are demanding.

Generally speaking, Market Economies are a lot better. Centrally Planned Economies make products which are 'worthless': E.g. If the State produces a car and you do not like it, its either you have it or don't have it. In Market Planned Economies, the consumer has the choice of choosing a wide range of car brands, i.e. BMW, Ford, Audi etc.