Question

(i) Who is Producer ?

Hint:

While consumers aim for "Utility Maximization," producers always aim for "Profit Maximization."
This distinction is fundamental to understanding market dynamics.

Answer 1

Step 1: Understanding the Concept:
In the study of economics, the producer is the central figure in the theory of supply.
Production is not the creation of matter but the addition of "utility" to existing materials.
Step 2: Detailed Explanation:
A producer organizes the four factors of production: Land, Labour, Capital, and Entrepreneurship.
The producer's primary motive is profit maximization, which is the difference between total revenue and total cost.
Producers can take various forms, such as an individual farmer growing crops, a factory owner manufacturing cars, or a software company providing digital services.
They play a crucial role in the circular flow of income by providing goods to consumers and income to factor owners.
Step 3: Final Answer:
A producer is an individual or a firm that combines various productive resources to create finished goods or services intended for sale in the market.