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Nature And Purpose Of Business

Question

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Why does a businessman willingly undertake business risk?

Solution

1. A businessman willingly undertakes the risk involved in the business activities because for bearing the risk, businessman gets the reward of earning profit. Risk is the price paid for getting profit.
2. The businessman willingly bears risks because it brings profit which is the main motive of every business. The higher the risk, the more is the profit. Generally the projects with which more risks are involved generate more profit as compared to less risky projects.

Some More Questions From Nature and Purpose of Business Chapter

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?

Explain any two business activities which are auxiliaries to trade.

State the different types of economic activities.

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