Which of the following is an example of a goods producing business?

• A. A restaurant
• B. A consulting agency
• C. A car manufacturing company
• D. A law firm

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the difference between goods-producing and service-producing businesses. Goods-producing businesses create tangible products that can be touched and stored, while service-producing businesses provide intangible services.
2. Step 2: Identify the nature of each option: A restaurant provides food services (service), a consulting agency offers professional advice (service), a car manufacturing company produces physical cars (goods), and a law firm provides legal services (service).
3. Step 3: Recognize that a car manufacturing company fits the definition of a goods-producing business because it produces tangible products (cars).
4. Step 4: Conclude that among the given options, the car manufacturing company is the example of a goods-producing business.
5. Step 5: Remember that in microeconomics, distinguishing between goods and services is crucial for understanding production, market structures, and economic activities.