Mini Essay: BUSINESS IN THE ECONOMY - What decisions does a business firm make in regard to what, how much and how to produce?

In an economy, a line of reasoning?s fundamental purpose is to admit merchandises or services to consumers and apply business sector strategies to maximise their profits. Entrepreneurs essential therefore make important decisions which lead affect the action of their business. The basic production decisions concerning a business firm be the choice of the product of which to produce, the quantity of production and the method of production. With these decisions conform to many factors to be considered.

As it is in a business?s best interest to satisfy consumer wants and needs through with(predicate) the provision of goods and services, entrepreneurs must evaluate whether a product will appeal to customers who are willing to pay an adequate price. there are several factors that must be taken into friendship in deciding on what products to produce or non to produce.

One of the factors that influence a business?s decisions in terms of what to produce is consumer preferences. Businesses must know what appeals to their tar break customers as customer satisfaction will see success for the firm.

Consumer incomes as well influence a business?s decisions. A business must ask itself whether the proposed price is affordable for their target food market and cater for its consumers? incomes. For example, if a business relies on local consumers for sales, and the total income of the area is relatively low, the business must consider whether or not the product is affordable enough as to aim sales whilst also ensuring profits to the business.

The market threshold of the product is also an influential factor for a business?s decisions. merchandise threshold is the tot of people required cypher by the frequency of their purchases that make a business liable. Market threshold is required for a business to determine whether the number of consumers of their product will generate enough sales revenue enhancement to make...

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