--%>

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 : Problem regarding to taxes and market

    The new supply and demand curves within University City are S0 and D0. But after the county commission imposed a $3 per six-pack excise tax upon beer, monthly sales of six-packs: (w) fell to 10,000, and buyers paid $6.50 each, bu

  • Q : Roundabout production Describe the

    Describe the merits of “roundabout” production?  Describe the term “division of labor”?

  • Q : Business Economics Hello, I would like

    Hello, I would like help with my assignment.

  • Q : Generalization and abstraction are

    Explain the statement: “Generalization and abstraction are nearly synonymous.”?

  • Q : Production possibility frontier

    Question: Scenario: You have been hired as the economics adviser for the newly elected State Premier. On your first day, the Premier introduces you to the new Minister for Health

  • Q : Explain about the principle of

    Economic efficiency needs that, relative to the other goods which different individuals might consume, the people who value exact goods relatively the most should own and/or use all goods. Such principle is termed as: (i) economic equity. (ii) allocat

  • Q : Define the term Weak-form market

    Define the term Weak-form market efficiency. Explain briefly.

  • Q : Competitive market economy will make

    Briefly explain how the competitive market economy will make the needed adjustments to reestablish an efficient allocation of society’s scarce resources?

  • Q : Recycling center Suppose you go to a

    Suppose you go to a recycling center and are paid 25 cents per pound for your aluminum cans.  However, the recycler charges you $.20 per bundle to accept your old newspapers.

  • Q : The financial investor about bonds

    Describe three ways to finance corporate activity.  Make a case that stocks are more risky for the financial investor than are bonds?