The resource market is different from the product market because
A)in the resource market, firms don't maximize profit
B)in the resource market, households don't maximize utility
C)in the resource market, firms are demanders and households are suppliers
D)supply and demand do not apply in the resource market
E)supply and demand do not apply in the product market

Question

Quizplus · Accepted Answer

In the resource market, firms are demanders of resources (such as labor, land, and capital) and households are the suppliers of those resources. This is different from the product market where firms supply goods and services and households demand them. Supply and demand still apply in both markets. It is incorrect to say that firms don't maximize profit or that households don't maximize utility in the resource market. It is also incorrect to say that supply and demand do not apply in either market.

The Resource Market Is Different from the Product Market Because