1. Discuss input markets and output markets with the help of the circular flow diagram.
The input markets and output markets can not be discuss without the two fundamental
decision making units.
Firm: A business or business firm is a company that produces goods or services, usually in an
effort to make a profit. Firms are the primary producers or the producing unit in the market
economy. They are organization that transforms resources (inputs) into products (outputs).
On the other hand Household are the consuming unit in the economy. They majorly provide
firms with land, capital and labor.
factors of productionThe inputs into the production process. Land, labor, and capital are the
