Question

Analyse the role of profit in a market economic system. ​

Answer 1

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➨In a capitalist economy, profit in a market system plays an important role in creating incentives for business and entrepreneurs. For an incumbent firm, the reward of higher profit will encourage them to try and cut costs and develop new products. To increase profits, firms may take action which cause market failure.

Answer 2

Answer:

In a capitalist economy, profit in a market system plays an important role in creating incentives for business and entrepreneurs. For an incumbent firm, the reward of higher profit will encourage them to try and cut costs and develop new products. ... To increase profits, firms may take action which cause market failure.