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A firm is one important unit of course. The firms help in coordinating economic activities.  These activities are usually large in numbers. It helps in selling the goods and services. All it does is recruit the important and necessary factors of production. Also, it organizes these factors.

Though firms earn a lot. Yet, they refrain from producing all the goods. They believe in trading. Trading helps everyone. A marketplace is though absolutely necessary for trading. This is absolutely why markets are the second important units.


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