Explain the nature of the basic economic problem facing society, and Essay

Explain the nature of the basic economic problem facing society, and show how business activity might provide a solution to this problem - Essay Example Business activities aim in the provision of all economic problems though not exhaustively. The active operation of firms in the market ensures the provision of goods and services. The large firms with the capacity of operating as independent organizations make their own decisions on how to enter and exit markets. The firms have also developed efficient ways such as choice on how well to utilize the available resources for maximum gain.1 Therefore, the firms have mechanisms for dealing with scarcity in the most productive way. In conclusion, some of the economic problems can be dealt with through the increase of firms in the market. The coming up of firms have the potential to reduce the transaction costs thus making commodities readily available. The incorporation of some goods within organizations rather than as a whole in the markets leads to attaining favorable costs.2 In addition, the use of new technologies makes a great contribution in the economic output of a country thus dealing with