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.

Select {responseValue}
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.

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The use of

Answer 1

Select the first option: "People spend their money on the products they want the most, which tells the producers what people want."

Explanation: In a market economy consumer spending creates price and profit signals. Producers watch demand (sales) and prices to decide what to make and how much.