The correct answer is deciding who needs the goods and services that are about to be produced.


“For whom should we produce?” is one of the basic questions of economics regardless of the economic system – command, market, or mixed.

To understand it better, you should study two concepts – scarcity and allocation. Not a single country in the world has unlimited resources at its disposal, and this scarcity drives its society to allocate them in a meaningful way. It is only possible if producers are able to determine their core consumers. A product can be perfect on paper.

However, if it is marketed toward a wrong demographic, it is bound to fail. It is only smart to study a typical customer and their key characteristics. For example, you can learn about their age, gender, income level, interests, hobbies, and life habits.

A big production on the factory.
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