How is business an economic activity?

Solution

Business activities consist of producing or purchasing and sale or exchange of goods and services to earn an income in the form of profit. Business is regarded as an economic activity for the following reasons:
(i) The purpose behind every business activity is to sell goods or services for profits.
(ii) Business activities require use of scarce resources like men, materials and capital.
(iii) Business activities satisfy various needs of businessman and the general public.
(iv) Business involves an element of risk of economic loss like risk due to theft, fire, earthquake, flood etc.

Some More Questions From Nature and Purpose of Business Chapter

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Nature And Purpose Of Business

How is business an economic activity?

Some More Questions From Nature and Purpose of Business Chapter

Define External Trade.

Define risk.

Name the functions of business.

How is business an economic activity?

Explain how industry, trade and commerce are related.

What is the role of profit in business?

How auxiliaries to trade help in removing hindrance?

What is business risk. What is its nature?

How would you classify business activities?

What are various types of industries?

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