Consumers decide what should be produced by expressing their preferences in terms of the amount of money they spend on various goods and services, thus creating
A) consumer demand.
B) price.
C) profit.
D) inflation.

Question

Quizplus · Accepted Answer

Consumer demand is created when consumers express their preferences by spending money on goods and services, indicating to producers what they should produce. This process is the basis of market economy, where the demand of consumers determines the supply of goods and services produced by businesses. Price, profit, and inflation are all influenced by consumer demand, but they are not the direct result of it.

Consumers Decide What Should Be Produced by Expressing Their Preferences