BASIC ECONOMIC PROBLEMS
Basic economic problem can be defined as the measure of things a producer need to tackle before getting into production.
There are some basic economic problems producers need to know or tackle before getting into production. these are:
*WHAT TO PRODUCE
This is one of the first problem producers need to know before getting into production. There will be no production if a producer does not know what to produce. That means knowing what to produce is the first stage of every production processes.
*HOW TO PRODUCE
How to produce a given product is also a problem that a producer need to have a good experience or knowledge on. You need to know how to make your own product attractive and different from other products in a competitive market. If you check deeply in our society, products are mostly competitive. for example the bourn vita and Milo are example of competitive products. in such cases you need to make your product more attractive to the consumer and more preferable.
How do you do that?
For instance if you are producing Milo and your competitor is producing bourn vita which are close substitutes, you need to check some things that bourn vita don’t have and then add them to your product which is Milo and also try to cut cost of production in order to sell at cheaper price.
*FOR WHOM TO PRODUCE
In such cases you need to know how relevant is the use of that product you are about to produce in that society. Because there are some specific types of product some consumers cannot consume. let’s take for instance in aspect of foods. There are certain people who are diabetic, they are advised not to take somethings that have much sugar, and you are to produce in a place where people with diabetes are much .You need to low the volume of sugar in your product else your product will have low patronage.
*HOW EFFICIENT IS THE USE OF RESOURCES.
A producer need to know how much it will cost him/her to produce the whole product. By having knowledge of this, he or she will know how to fix the quantity or quality in a way that he won’t lose profit.
By following some of these points above, a producer will be able to tackle some economic problem in production.