The type of production is regulated by the central planning authority. For example, it was determined that the economic production level of automobile in Hungary is somewhere between 200,000 and 300,000 units per year. Simultaneously, it was determined that the demand for automobiles in Hungary is somewhere between 20,000 and 30,000 units. Accordingly, Hungary could not economically justify its own automobile production. Rather than build its own automobiles, Hungary has entered into reciprocal agreements with its trading partners whereby Hungary supplies many of the other countries from its large bus factory and in turn buys its autos from the other countries. Similar examples can be found in other areas of production. Each country will attempt to specialize in types of production where it has an advantage and avoid other specific areas.
When demand manifested itself there is no guarantee that demand will be satisfied. A product may emerge to satisfy the demand or certain acts may be taken to temper the demand. For example, there may be a promotional campaign to show that that particular good is not “socially acceptable.”
Since products tend to be generic as opposed to branded, lack of competition keeps the level of product quality quite low. There are, however, recognizable differences among products depending on what factory produced them, there seem to be a form of brand competition among products based not on brands, but on the factor of origin.