Short Answer 
A command economy is characterized by government control over production and distribution, prohibiting personal ownership of key resources and restricting private enterprise. The government plans economic activity and sets prices, often disregarding consumer demand, and this system is prevalent in communist nations like China.
Step 1: Understand the Basics of a Command Economy
A command economy is an economic system where the government makes all decisions regarding the production and distribution of goods and services. In this system, the government controls and regulates the economy rather than leaving it to the free market. The primary characteristics include:
- Government control over most sectors of the economy
- Centralized planning of production and pricing
- Prominent in communist nations
Step 2: Recognize Prohibition of Personal Ownership
In a command economy, personal ownership of key resources, such as land, is generally prohibited. This means that individuals cannot own land or businesses, which significantly alters the economic landscape. Key prohibitions include:
- Personal ownership of land and property is not allowed.
- Private enterprise and entrepreneurship are restricted or nonexistent.
- Government owns and controls resources for state objectives.
Step 3: Understand Economic Control and Planning
The government in a command economy actively sets production levels and prices, meaning that consumer demand has little to no influence on these factors. The consequences of this control include:
- Production determined by government needs, not consumer preference.
- Prices set by the government to meet their objectives rather than market forces.
- Commonly found in countries such as China and other communist regimes.