how do choices end up determining What how and for whom goods and services are produced?
Answers
1.What to produce?
-Choosing what to produce depends upon the type of market existence in that region.
It also depends on which product is in need in that period and which can create an opportunity iof profit in producing it
-It also depends on the preferences of the people in the market and the need and want for that product.
It also depends on the various factors affecting demand.This factors are to be considered before production that it is sustainable or not.
2.How to produce?
-The choice between how to produce can be between using labour intensive techniques or capital intensive. Which technique will cost less and can make more profits.
-The choice between this can be made by analysing the nature of the goods and services .If it is a labour intensive product the firm need to hire more labours and less capital and vice verse.
-It also depends on the composition of labour in the country or a region if there are less labour you need more capital and more labour than less capital.
-It also depends on the wages of labourer and type of labour. If the labour is cheap in a country or a region labour intensive techniques can be used and vice verse.
3.For whom to produce?
-The problem of choice of for whom to produce can be solved by knowing the market structure and analysing it.
-If there is huge demand and need of that product for certain population the product should be produced.
-The age composition in the market should also be analysed for knowing the target people.