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Homework answers / question archive / In a market economy, businesses are encouraged to produce because of: a

In a market economy, businesses are encouraged to produce because of: a

Economics

In a market economy, businesses are encouraged to produce because of:

a. the profit motive

b. altruism

c. government direction

d. civic duty

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An answer to this question is:

a. the profit motive

In a market economy, the companies or business owners are motivated by the profits their businesses generate. Therefore, the business owners invest more in ventures that bring higher returns. For instance, an investor will build a private hospital in urban areas as opposed to remote rural areas because in urban areas the population is high and demand for medical services is also high.