Question

explain how the problem of what to produce is solved under capitalist economy​

Answer 1

$\huge{\underline{\underline{\sf{Answer:-}}}}$

• In a capitalistic economy this problem is solved by the working of free price mechanism.
• Under this only commodities which have positive prices are produced.
• As also what quantity to produce is solved by working of free price mechanism.
• Quantity of a commodity is fixed at the level where it's demand =supply.

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