How goods are produced is determined by:
A)consumer demand.
B)government intervention to force businesses to produce goods cheaply.
C)big business activity.
D)business competition to buy factor inputs and sell goods most cheaply.
E)none of the above.

Question

Quizplus · Accepted Answer

The way goods are produced is largely determined by business competition, as firms must compete to buy the factor inputs (such as labor and raw materials) at the lowest price possible and then sell their products at the most competitive price possible to attract customers. Consumer demand and big business activity can also influence production decisions to some extent, but they are not as direct and pervasive as the forces of supply and demand in a competitive market. Government intervention to force businesses to produce goods cheaply is not a common method of determining production methods, as it typically involves heavy regulation or control of the market, which limits competition and can lead to inefficiencies.

How Goods Are Produced Is Determined By