Will producers continue to supply a good

Reference no: EM133706586

Will producers continue to supply a good or service if consumers are unwilling to pay a price sufficient to cover the cost? Yes. In a market economy, businesses will continue to supply a good or service if the revenues from the sale of the product do not cover the cost of production, since revenues will eventually expand to cover production costs, yielding a profit. No. In a market economy, businesses will continue to supply a good or service only if the revenues from the sale of the product are sufficient to cover the cost of the resources required for its production, since at that point, profit is maximized.

Reference no: EM133706586

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