Mr Shyam wanted to start business of supplying readymade garments. But he was wondering about how much profit or return on investment he would be able to earn. This situation reflects which characteristic of business?
Answers
Explanation:
Characteristics of Business:
Economic activity: All business activities are economic activities and are done for the sole purpose of earning money.
Production and procurement of goods and services: A business activity involves production or procurement of goods and services. A manufacturer is involved in production, while a shopkeeper is involved in procurement.
Sale and exchange of goods and services for the satisfaction of human needs: Sale and exchange of goods and services is done to satisfy human needs.
Dealing in goods and services on a regular basis: One time dealing in goods or services cannot be termed as a business. The business should happen on a regular basis.
Profit earning: Profit earning is the fundamental motive of doing a business. Other motives are there but they depend on profit motive.
Uncertainty of returns: Returns can never be certain in business activity. This happens because of external factors which are outside the control of the business organization.
Element of risk: An element of risk is always present in business activity.
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