The households are considered as necessary part of the circular flow of goods because they buy the goods sold at product markets.
What are product markets?
A market where the different types of goods and services available are sold to the different set of consumers, where the goods are finished goods and are completely ready to be consumed are sold in a product market.
Product markets are such markets where the goods are purchased directly by the end consumer. Usually, the buyer in a product market has an intention to self-consume the products, say a household goods customer.
Hence, option A holds true regarding the product markets.
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