What mechanism assures that firms produce outputs that consumers actually desire?
A)governmental regulations on the mix of outputs
B)altruism
C)the desire for profit
D)a desire to serve others without thought of reward
E)All of the responses are correct.

Question

Quizplus · Accepted Answer

The desire for profit is a powerful mechanism that motivates firms to produce outputs that consumers desire. Firms want to maximize their profits, and the best way to do that is to make goods and services that people want to buy. If they don't do this, they stand to lose money and may go out of business. Government regulations may affect the mix of outputs, but they do not guarantee that the products produced meet consumer desires. Altruism and a desire to serve others without thought of reward are not reliable mechanisms for promoting consumer satisfaction.

What Mechanism Assures That Firms Produce Outputs That Consumers Actually