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Understanding the Market — Entrepreneurship STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEntrepreneurshipUnderstanding the Market3 Marks
Question
Briefly discuss the 'characteristics of business'.
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Answer

Characteristics of business:
  1. An economic activity Business is considered to be and economic activity because of the following reasons:
  • It is undertaken with the objective of earning money.
  • It involves sale, purchase of goods/ services for mutual profit.
  • It makes use of scarce resources which could be alternatively used.
  1. Deals in either production, purchase, procurement of goods or renders services or both Business firms either manufacture goods or acquires them from producers for reselling.
  2. Sale or exchange of goods and services for the satisfaction of human needs One of the important characteristics of business is that, there should be sale or exchange of goods and services between the buyer and seller for the satisfaction of human needs.
  3. Dealings in goods and services on a regular basis Business involves dealings in goods or services on a regular or daily basis. One single transaction of sale or purchase does not constitute business.

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