KCSE Business Studies Topical Questions and Answers

Factors influencing decisions on what goods and services to produce

30/3/2022

Profitability – people produce goods whose return are faster and higher
Government policy – Trade produce goods that are allowed by the laws of the country
Availability of resources – Goods produces should be the one that have adequate resources
Level of competition – People produce goods whose competition is not there as compared with the one that have shift competition
Market – Goods which have market are greatly produced
Cost of production – Goods and services produce should be cheaper in terms of overall cost

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Protection of strategic industries – food and clothing industries.
Creation and protection of employment – restrictions discourages imports thereby, encouraging, establishment of industries opportunities locally.
Prevention of dumping – to rid disposal of cheap, substandard and inferior goods.
Protection of local infant industries – young growing industries are unable to complete favourably with established industries.
Preservation of balance of trade deficit in a country.
Expanding market for local products – economic barriers creates large market for locally produced goods and services.

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Creation of employment – provide opportunities for jobs.
Proper utilization of available resources – idle resources are exploited to create goods.
Provide outlet for goods and services – facilitate surplus disposal.
Link production and consumption.
Source of government revenues – government impose taxes on trading activities.
Avail variety of goods and services – consumer choose the most satisfying.
Enhances harmony/interpersonal relations – buyers and sellers interact.