Question

How do producers know what and how much to produce in a market economy?

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People spend their money on the products they want the most, which tells the producers what people want.

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Businesses ensure there are enough products for people who need them, even if they cannot afford them.

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The federal government uses the census to determine what products people want.

Select {responseValue}
The use of focus groups and surveys determines what people would like to buy and how much.

Answer 1

Select the first and fourth.

- People spend their money on the products they want the most, which tells producers what people want. (True — consumer purchases and prices signal demand.)
- The use of focus groups and surveys determines what people would like to buy and how much. (True — firms use market research as additional information.)

The second and third statements are not how production is determined in a market economy.