Firms are business concerns that produce goods and services and employ workers and other factors of production. Which term describes these organizations?

Firms are business concerns that produce goods and services and employ workers and other factors of production. Which term describes these organizations?

• A. Firms
• B. Households
• C. Government
• D. Markets

Answer: (A)

Firms are the business concerns that organize resources to produce goods and services and hire workers and other factors of production. They are the producers in the economy, using labor, capital, land, and entrepreneurship to create output in order to earn profit. This distinguishes them from households, which provide factors of production and consume, and from the government and markets, which refer to the public sector and the mechanism for buying and selling, respectively.

Firms are the business concerns that organize resources to produce goods and services and hire workers and other factors of production. They are the producers in the economy, using labor, capital, land, and entrepreneurship to create output in order to earn profit. This distinguishes them from households, which provide factors of production and consume, and from the government and markets, which refer to the public sector and the mechanism for buying and selling, respectively.