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Question
Answer in brief.
State any four features of business.
Solution
Business is an economic activity which is done to earn a profit.
The following are the features of business:
- An economic activity: Business is an economic activity. Because it is done to earn profit for livelihood.
- Two parties: Business is mainly concerned with the production and distribution of goods and services. It means business transactions involve exchange and in any exchange two parties are involved. Thus business involves two parties.
- Profit motive: Every business is done with a motive of making a profit. Therefore all the activities of business revolve around profit. A businessman is not satisfied with the profit he gets, but he tries to maximize the profit either by increasing the production or by reducing the cost. He tries to find out new customers and new markets.
- Production of Goods and Services: Business includes the production of goods and services. Raw materials are used and the finished goods are produced.
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