Question

Firms are motivated to minimize production costs in a market economy because:

Multiple Choice
a.least-cost production techniques use the smallest total quantity of resources.
b.it is the most environmentally friendly way to produce goods.
c.the government provides tax credits and subsidies to low-cost producers.
d.doing so will allow them to maximize their profits.

Answer 1

Firms in a market economy are motivated to minimize production costs in order to maximize their profits. This allows them to offer goods and services at a competitive price and use resources efficiently.

Step-by-step explanation:

In a market economy, firms are motivated to minimize production costs because doing so will allow them to maximize their profits.

When firms can minimize their production costs, they can offer goods and services at a competitive price, attracting more customers and increasing their market share. Moreover, by minimizing production costs, firms can also allocate their resources efficiently and use the smallest total quantity of resources, which is beneficial for their long-term sustainability.