Question

.For any business enterprise profits is not the main objective but it is one of the most important objectives. Al other objectives can be achieved only if business earns profit. Is the above statements true:​

Answer 1

Answer:

The first statement is not true and the second statement is true.

Explanation:

The first statement is not true because for any business enterprise earning profit is the main profit. For the growth and to expand the business enterprise profit is necessary. Also profit shows scale of stability, the efficiency and advancement of the business enterprise.

The second statement is true because all the objectives of a business firm like the economic objective or the social objective depends on the profit of the enterprise. For example: more the enterprise will earn profit more they will be able to hire more labourers.

Answer 2

Answer:

The first part of the statement is not true but the second statement is true.

Explanation:

As we know that the main objective of a business enterprise is to earn profit as it serves as an incentive to the entrepreneurs, the first statement stating it as not the main objective is untrue. The profits earned by the enterprise serves as the most important objective of the entrepreneurs as well, as the entire running of the enterprise depends on the revenue over cost, i.e., the profit.

We know that to run a full fledged business, it is very important to serve the factors of production, i.e , land, labour, capital and enterprise. The land gets rent, labour gets wages, capital gets interest and enterprise gets profit. The amount of profit earned by the entrepreneur will decide the amount of labours to be employed and the capital stock to be kept along with them. Therefore, it is clear that the other objectives can be achieved only if the business earns a good amount of profit. More the profit earned, more factors will be employed which will lead to more employment generation or a state of nearly full employment of resources.

Therefore, it all depends on the amount of profit earned by the enterprise.