Describe the characteristics of business. - Vidyadip

Question

Describe the characteristics of business.

✓

Answer

Entrepreneur: There must be a person(s) to take initiative for establishing a business and undertake the risk.
Economic Activity: All those activities related to the production and/or distribution of goods and services, with economic motive i.e. profit can form part of business.
Production and Procurement of Goods and Services: Business either produces or procures goods and services for offering them to consumers.
Sale of Goods and Services: Business involve sale, exchange or transfer of goods and/or services for the satisfaction of human needs against a price.
Regularity: One time transaction or dealing in goods and services is not business even if one earns profit in return. Business is done regularly.
Utility Creation: Business activities result in creation of utilities i.e.
1. Form Utility.
2. Place Utility.
3. Time Utility.
Profit Earning: Point Sector Profit is the reward for undertaking a business activity and no business can survive for long without earning profits.
Uncertainty of Return: Business does not guarantee for the return of either principal amount invested in the business or the profit.
Element of Risk: Business involves risk i.e. uncertainty. Higher the risk, higher the profit.

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