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

Economics Dec 18, 2020

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

a. the profit motive

b. altruism

c. government direction

d. civic duty

Expert Solution

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.

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