Final answer:
The statement that a business model describes how a company produces, delivers, and sells a product or service to create wealth is true. Business models are essential for defining a company's plans for profitability and involve detailed strategies for interacting with the market.
Step-by-step explanation:
A business model indeed describes how a company produces, delivers, and sells a product or service to create wealth. The statement is true. A business model encompasses the plan for making a profit by defining the products or services the business will sell, the target market it has identified, and the expenses it anticipates. Companies adapt their business models to the dynamics of the market to remain competitive and create economic changes. The market revolution is a prime example of economic and social transformation, having significantly changed the way companies operate and interact with the markets. In a broader sense, businesses and firms within the Circular Flow Model represent the production side, demanding resources from households in the Resource Market to create goods and services, which are then sold in the Product Market.
Households obtain income to buy goods and services by providing labor and other resources to firms. This exchange is depicted through arrows 'C' and 'D' in the model, connecting the markets for goods and services with the factors of production. Therefore, the successful functioning of a business model is fundamental to ensuring wealth can be created, leading to an increase in the overall economy's prosperity.