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17 February, 17:33

Your friend is a business owner in a market economy. What decides how to allocate the productive resources he uses?

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  1. 17 February, 18:57
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    In a market economy, it is the consumers that will decide how to allocate the productive resources a business uses. The allocation of products is determined by a concept that is known as supply and demand. When there is a demand for a certain product, then obviously the business has to supply that product. It is the job of the business to look out for signs of demand of a certain product and they have to know just how much of that product he should supply.
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