The basic activity of a firm is
A)to set the prices of its products as high as possible.
B)to compete with other firms that produce similar products.
C)to provide jobs for its employees.
D)to use inputs to produce outputs of goods and services.

Question

Quizplus · Accepted Answer

The basic activity of a firm is to use inputs to produce outputs of goods and services. This is what distinguishes a firm from other entities, such as households or governments, which consume goods and services. The production of goods and services is what generates revenue for the firm and allows it to compete with other firms in the market. While setting prices and providing jobs are important aspects of the firm's activities, they are secondary to the production process.

The Basic Activity of a Firm Is