Question

If an economy is going to produce the goods and services most wanted by society, what do competitive firms do?

1) Produce goods and services at the lowest cost
2) Produce goods and services based on government regulations
3) Produce goods and services based on consumer preferences
4) Produce goods and services without considering demand

Answer 1

Competitive firms in a market economy produce goods and services based on consumer preferences.

Step-by-step explanation:

In a market economy, competitive firms produce goods and services based on consumer preferences.

They aim to meet the demands and desires of the consumers in order to maximize their own profits.

These firms prioritize understanding what consumers want and strive to produce goods and services that align with those preferences. By doing so, they are able to attract customers and compete effectively in the market.