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Who really decides what shall be produced? Explain.

Who really decides what shall be produced? Explain.

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Answer #1

Consumers in a market economy decides what shall be produced. Producers cannot sell their products unless there is sufficient demand for their products in the market. If a producer produces more than the market demand, there will be excess surplus and goods will remain unsold. Market demand is based on taste and preferences of consumers. If there is demand for a particular good, that good will be produced in the market. Producers acts as suppliers to consumer desires.

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