Which Actor in the Simplified Circular Flow Model Is on the Supply

question 1

Multiple Choice

Which actor in the simplified circular flow model is on the supply side of the goods market?

• A) Firms
• B) Households
• C) Markets for factors of production
• D) Government

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Definitions:

Higher Profits

The increased financial gain achieved by a business when its revenue exceeds its expenses by a greater margin than before.

Costs

Costs refer to the amount of money required for the production of goods or services, including expenses related to labor, materials, and overheads.

Competitors

Entities or individuals that are in the same industry or market and vie for the same customers or resources.

Decrease Supplier Power

Involves strategies or actions taken by purchasing companies to reduce the influence and control of their suppliers over prices, terms, and supply.