In the circular flow diagram, firms get their ability to pay for the costs of production from the:
A) Revenues they receive for their products
B) Resources they acquire in the resource markets
C) Incomes they earn for their resources
D) Goods and services they get in the product markets

Question

Quizplus · Accepted Answer

Firms are able to pay for the costs of production from the revenues they receive from selling their products in the product markets. This is because the revenue generated from the sale of goods and services is the main source of income for the firms.

In the Circular Flow Diagram, Firms Get Their Ability to Pay