Describe the role played by the producers in an economic system, and give two examples of someone being a producer.

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pohnpei397's profile pic

Posted on

Producers play a huge role in any economic system.  This is because producers are the entities who are involved in making goods and services.  We generally say that producers include privately owned firms and the government.  This means that any firm or government agency that produces goods or service is a producer.

Some examples of producers are Microsoft and this website.  Microsoft is a huge producer that creates software for people to use on computers.  eNotes is not huge, but it creates a service that people (you) use.

Producers are also important in the economic system because they are the ones that employ workers.  This means that they create goods and services for others to buy and they pay workers who will then be able to buy goods and services from various producers.

kplhardison's profile pic

Posted on

In an economic system, producers play the role of providing goods and services. The tools they use for productivity 9the act of producing) are "factor inputs." These factor inputs are labor workers and capital (money that funds production).

Labor, or workers, create products, but economists are speaking of employers when they use the term "producer." Employers pay wages to workers. Employers create economic value by producing goods and services. Without producers, economies have no goods or services to exchange. In such an economy, each person would a self-sufficient producer, surviving with only what they alone can produce. An economy of producers is much more efficient and much richer is what is available to each person.

Firms--businesses, manufacturers, corporations etc--are the main economic producers, but governments are producers as well. Governments produce services, like public schools, public mail delivery, public disability funding, etc, but they may also produce goods, like our national parks and medical insurance for the poor or like oil in OPEC nations.


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