Final answer:
Customers have two types of needs: basic needs like food, clothing, and shelter, and wants, which are specific expressions of those needs. To satisfy these, a variety of goods and services are produced based on demand, supply, and personal preferences.
Step-by-step explanation:
Every customer has two types of needs: basic needs and wants. Basic needs include essentials such as food, clothing, and shelter that are necessary for survival. On the other hand, wants are the specific ways in which people express those basic needs based on personal preferences and desires. For instance, while food is a basic need, the specific desire for pizza is a want. Additionally, customers develop wants for more elevated lifestyle choices, such as designer clothing or luxurious living spaces, well beyond their basic necessities. To meet these needs and wants, a variety of goods and services are required, which leads to questions like what kinds of goods will be produced, how they will be produced, and for whom they will be produced. The decisions on these matters depend on the laws of demand and supply, personal preferences, income levels, and the mechanisms available for exchange and transportation. As people's lifestyles become more complex, their range of needs and wants grows, necessitating a more sophisticated system for securing and satisfying these desires.