Flashcards in Markets Deck (7)
Buying and selling factors of production from households to firms e.g. Labour, capital
Buying and selling goods and services, consumers are demand and producers are supply, firms to households
Who sets prices in market economies?
Consumer sovereignty (consumer is king)
For whom (market)
Whoever is willing to pay for the resources
How to produce (market)
Efficiently to operate profitably
How does a market economy promote efficiency?
The producers incentive for profit makes them minimise costs