--%>

Why businesses are not really free to produce

Why businesses are not really “free” to produce what they wish?

E

Expert

Verified

Businesses are not really “free” to produce what they wish. Their production choices with consumer choices or face losses and eventual bankruptcy have to match.  Profit-seeking firms must consider the allocation of the “dollar votes” when they make their production decisions. Resource demand is a “derived” demand, i.e. it depends on the demand for the products produced by the resource.

   Related Questions in Business Economics

  • Q : Reason of Economic problem Why an

    Why an economic problem does arise? Answer: It arises due to following reasons: A) Shortage of resources. B) Alternative utilizations of resources. C) Limitless wants and limited resources.

  • Q : Expansion of preschool programs for

    Use the circular flow model to confirm this assertion for an expansion of preschool programs for disadvantaged children?

  • Q : Problem regarding to intermediaries and

    Society gains from the activities of intermediaries which succeed within: (1) falling uncertainty and transaction costs for last consumers. (2) arbitrating strikes and defending workers’ rights. (3) creating productive jobs for unskilled workers

  • Q : What happens in the product markets

    What happens in the product markets?

  • Q : Laffer curve & Tax rate Question: Do

    Question: Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change? Using the 'human capital' investment model,

  • Q : Firms operating under Cournot

    Question: Suppose three identical firms are engaged in Cournot competition in quantities. They all have marginal costs equal to 40. Market demand is given by:

    Q : Heterodox approach for more production

    From the heterodox approach, what options does the enterprise need to produce more output? What effect do these options put on its cost structure?

  • Q : Problem on current production

    I have a problem in economics on current production possibilities frontier. Please help me in the following question. The combination of 70 units of clothing and 30 units of food are: (1) Completely employs the economy's capacity. (2) Would leave most

  • Q : Calculate Equilibrium Quantity and Price

    1. The owner of a firm calculates that next year's profit will be $1,000. Each successive year profit will increase by 10% (i.e. year 2: $1100; year 3: $1210 and so on.) At the end of the 5th year the firm could be sold for $20,000. A) if the appropriate di

  • Q : Divide of the study of economics MOST

    The study of economics is MOST frequently divided within: (1) positive economics and negative economics. (2) macroeconomics and microeconomics. (3) subjective economics and objective economics. (4) supply side and demand side economics. (5) conservative economics and