How do market mechanisms solve the three problems of economics?

Answer 1

first of all and as a learner of Business Finance we must know initialy that what are the three problems of economics 1) what to produce 2) how to produce 3) for whom to produce.

WHAT , HOW & FOR WHOM TO PRODUCE:

by observing the current market strategy one should assess according to the consumption and consumers demand behhaviour that is any thing in your local market which is fully unavailable or shortly available as per its demand or available but on expensive price which may be because of import and if we may produce it locally by maintaining the standard of available imported product on the cheeper rate, which will emphasize the consumer to shift its demand on the alternative product of same standard on cheeper rate. by sharif

Answer 2

Market mechanisms solve the economic problems of what to produce, how to produce, and for whom to produce by allowing prices to signal the preferences and constraints of both producers and consumers. Through supply and demand interactions, resources are allocated efficiently, goods and services are produced in the most cost-effective manner, and income distribution is shaped based on individual preferences and choices.