Business context
Producers looked for and found the least-cost combination of resource in producing their output. Combination of resource to produce a product is determined by its availability, technology (ability to make) and mostly cost of production. In free market economy suppliers of resources who are after making revenueprofit make these resources available. Resources are scarce and as result they carry a price tag which is determined by supply and demand in resource market (Campbell et al 2004). These producer of the hardware products, produced because the revenue generated after sale is enough to pay wages, rent, interest and a normal profit to the business.
Consumers through their money votes and decide on what to be produced. Producers of these products produced or continue to produce because there is ready market for their products otherwise they would have closed their businesses. Sometimes producers themselves can determine on fate of their products. A firm decides whether to continue or cease from producing it, depending on the demand for the product and cost of making it. Therefore depending on the revenue generated by selling the product over the economic cost, the producers hold the authority on whether a product is worthy to continue investing companys resources in the product line (Campbell et al 2004).
0 comments:
Post a Comment