The economic participant who decides how to use the factors of production and for what purpose in called a________________?
Correct answer: A. firm
- A. firm
- B. household
- C. market
- D. product
Explanation
A firm combines land, labour, capital and entrepreneurship to produce goods or services, deciding how resources should be used. A household mainly consumes resources, while a market coordinates buyers and sellers.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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