In the context of microeconomics, are firms primarily buyers or sellers in the goods and services market, and in the labor market?

• A. Firms are buyers in both the goods and services market and the labor market.
• B. Firms are sellers in both the goods and services market and the labor market.
• C. Firms are sellers in the goods and services market and buyers in the labor market.
• D. Firms are buyers in the goods and services market and sellers in the labor market.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the roles of firms in different markets. In microeconomics, firms participate in multiple markets, primarily the goods and services market and the labor market.
2. Step 2: Analyze the goods and services market. Firms produce goods and services to sell to consumers, so in this market, firms act as sellers because they supply products.
3. Step 3: Analyze the labor market. Firms need labor to produce goods and services, so they hire workers by paying wages. Therefore, in the labor market, firms are buyers because they demand labor.
4. Step 4: Summarize the dual role of firms. Firms sell goods and services to consumers (sellers in the goods market) and buy labor from workers (buyers in the labor market).
5. Step 5: Conclude that the correct statement is: Firms are sellers in the goods and services market and buyers in the labor market.