Question

the need to get goods from producers to consumers raises which of the following basic questions? A. what is to be produced? B. What is the most effective allocation? C. How is production to be organized? D. How are goods and services to be distributed?

Answer 1

How are goods and services to be distributed?

Answer 2

The fourth alternative is correct (D).

The microeconomic theory determines the fundamentals of production of goods and services and deals with decision issues on what to produce, on production efficiency, allocation and organization of production, among others.

However, when it comes to taking goods from producer to consumer, we are talking about the issue of the distribution of goods and services in space. This is part of the scope of Productive Localization Theory. Basically, this theory suggests that firms choose a strategic point in space that is able to optimize the distribution of goods and services, minimizing transportation costs.