When businesses collect demographic information on where people live, what they buy, and how they spend their time, they are responding to the

Social environment.

Explanation:

When businesses collect demographic information on where people live, what they buy, and how they spend their time, they are responding to the social environment. The social environment comprises of values, beliefs, practices, customs and behaviors of a group of people living together in a society and how their actions influence their surroundings or environment.

Demographics can be defined as the study and analysis of the characteristics of a population based on pre-defined factors such as education, race, income, sex or gender, and age.

Additionally, businesses gather, analyze and use demographic informations about people in the target market so as to have a competitive edge or advantage and to help build a strong relationship.

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