Which of the following is correct with respect to input and output markets?
A) In the input market, firms supply goods and services in response to demand on the part of households.
B) In the output market, firms buy resources from households, which then supply those resources.
C) Consumer buying patterns provide information that helps companies decide which products to produce.
D) Consumers are restricted in the companies they can work for.
E) Input and output markets exist only in communist countries.

Question

Quizplus · Accepted Answer

Consumer buying patterns provide information about the demand for certain products, which helps companies decide which products to produce in the output market. In the input market, households supply resources and factors of production to firms in response to demand from firms. The statement in option A is incorrect. Option B is incorrect as firms buy resources from households in the input market. Option D is unrelated to input and output markets. Option E is incorrect as input and output markets exist in all kinds of economies, not just communist ones.

Which of the Following Is Correct with Respect to Input