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Chapter 1: Problem 17

Are firms primarily buyers or sellers in the goods and services market? In the labor market?

Short Answer

Expert verified
In the goods and services market, firms act as sellers, producing and selling goods and services to consumers, businesses, and the government. In the labor market, firms are considered buyers, as they demand labor and hire workers to produce goods and services in exchange for wages or salaries.

Step by step solution

01

Role of firms in the goods and services market

In the goods and services market, firms act as sellers. They produce goods and services and sell them to consumers, other businesses, and the government. In this market, their main role is to supply products and services to satisfy the needs and wants of their customers, who are the buyers.
02

Role of firms in the labor market

In the labor market, firms are considered buyers. The labor market is where workers, who are considered the sellers, provide their skills, knowledge, and time in exchange for wages or salaries. Firms demand labor to produce goods and services, so they are the ones who "buy" or hire workers to use their labor in the production process.

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