Question

Economics

Which situation best illustrates the role of businesses in the circular flow of goods?
A. A factory produces plastic used to make toys.
B. A company designs a new line of laptops.
C. A supermarket sells goods made all over the country.
D. A fisherman sells the fish he catches to a local market.

Answer 1

The best illustration of businesses in the circular flow of goods is a supermarket that sells products from various regions to households, representing the goods and services market.

Step-by-step explanation:

The situation that best illustrates the role of businesses in the circular flow of goods is: C. A supermarket sells goods made all over the country. This example represents the product market aspect of the circular flow diagram, where businesses (in this case, the supermarket) sell a wide range of goods to households. The supermarket is acting as an intermediary between the producers of those goods and the consumers who are the households. This demonstrates the flow of goods from firms to households in exchange for revenue, as depicted in the outer circle of the circular flow of the economy.