Why does the free enterprise system tend to keep the quality of the products high?
A)The government regulates the product to ensure that the quality remains high. Control of the price ensures that it remains reasonable.
B)Producers will be motivated to decrease profit by increasing quality.
C)Producers will be motivated to decrease costs by increasing quality.
D)Producers will be motivated to improve quality to differentiate their product in the market.
1. Profit is the financial gain resulting from an exchange
2. Voluntary exchange is where buyers and sellers willingly choose to participate in transactions and both parties receive a net benefit
3. Open opportunity occurs when consumers and producers can choose to compete in any marketplace
4. Producers must meet customer expectations for the price or be forced out of the market by competition because of the open opportunity
5. Producers will be motivate to improve quality to differentiate their product in the market
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Chloe is 100% right!!!!!
Just took the test made a 100
The correct answer is D) Producers will be motivated to improve quality to differentiate their product in the market.
In a free enterprise system, businesses operate in a competitive market where multiple producers are vying for customers. In order to attract and retain customers, businesses need to set themselves apart from their competitors. One effective way to do this is by offering high-quality products.
In a free market, consumers have the freedom to choose from a variety of products available. They have the ability to compare prices, features, and quality before making a decision. If a producer wants to gain a competitive edge and attract customers, they must ensure that their products are of high quality.
When producers offer better quality products, it helps to build a positive reputation for their brand. Satisfied customers are more likely to become loyal and repeat customers. This, in turn, can lead to increased sales and profits for the business.
Additionally, quality products often result in customer satisfaction and positive word-of-mouth referrals. When customers have a good experience with a particular product, they are more likely to recommend it to others. This can generate more sales and further improve the profitability of the business.
Therefore, in a free enterprise system, producers are motivated to improve the quality of their products to differentiate themselves from competitors, attract customers, and ultimately increase their profits.