Reference no: EM133083268

In Chapter 9, the authors describe the differences in the East German and West German economies prior to reunification. One key difference was found in the quality of goods produced by Eastern and Western producers. The authors argue that the West German firms had access to high-income consumers in competitive market economies, so they had to produce higher quality and higher value goods. In contrast, the East German firms were producing for a poorer group of consumers in planned socialist systems, so they did not have to meet the same competitive market forces.

Is it possible for the opposite outcome to occur -- can non-market systems produce better products under some circumstances? Please explain your response. Also, if you believe this is possible, can you provide an example?

Reference: Chapter 9 from J. Barkley Rosser Jr., Marina V. Rosser - Comparative Economics in a Transforming World Economy