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AQA GCSE · Question 18 · How markets work
Explain one key economic decision for a producer.
Explain one key economic decision for a producer.
How to approach this question
1. State one of the three basic economic questions from a producer's perspective (What, How, or For Whom to produce). 2. Briefly explain what this decision involves.
Full Answer
Every producer must face the three fundamental economic questions:
1. **What to produce?** Deciding which product or service to create and sell.
2. **How to produce?** Deciding on the production method, for example, whether to use labour-intensive or capital-intensive techniques.
3. **For whom to produce?** Identifying the target market or consumer group for the product.
Common mistakes
Giving a decision that is too specific (e.g., 'what price to charge') without linking it to one of the fundamental questions, or giving a consumer's decision instead of a producer's.
Practice the full AQA GCSE Economics Paper 1
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