Who decides what to produce, how to produce and where to produce

We start off with supply and demand. It all started when men had needs. He would have only 2 basic needs: Food and Shelter, he would have hunted for it, there was no supply and demand, people just took what they wanted and when they needed. But today with supply and demand, demands drive what to produce. No single person decides what to make…. well actually a person does decide whether to make it or not BUT his decision is influenced by demands of the layperson, the regular taxpayer!

Now demand splits onto 2 parts wants and needs, most manufactures try to capitalize on the needs because they are, as the name said “Needs” but too many companies producing 1 thing would over-saturate the market, leading to lower profits. so companies move to the wants. Stuff like phones, TV’s and other luxuries and that’s what drives the manufacturing industry!.

The supply and demand chain also changes according to the price, if you have demand and supply but have a shit price nobody would buy your items and demand would drop like you trying to skate.

references: Besanko & Braeutigam (2005) p.33,
Microeconomics and Basic Mathematics. New Delhi: VK Publications. pp. 28. ISBN 81-87140-89-5.

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