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Question
Which is the only factor of production that earns profits? Why?
Answer in Brief
Solution
- The only aspect of production that generates profits is the entrepreneur, who generates profit as the residual amount after accounting for all other factors of production (land, labour, and capital).
- An entrepreneur is an individual who generates profits by integrating the other factors of production, including land, labour, and capital.
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Factors of Production Entrepreneur
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Chapter 1: Factors of Production - Exercise [Page 31]
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