What is the basic activity of a firm?
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 such as resources, labor, and capital to produce outputs of goods and services. This is the essence of the production process and the main reason why firms exist in the first place. Setting prices, competing with other firms, and providing jobs are all important activities, but they are secondary to the primary goal of producing goods and services.

What Is the Basic Activity of a Firm