'Business is an organised institution that operates to provide goods and services under the incentive of private gain'. Discuss.

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Solution

The statement is correct in these respects

(i) Business is an economic activity as it is undertaken with the main objective of earning profits. Profit is essential to cover costs and risks of the business. Every business must earn a reasonable profit to survive and grow.

(ii) It involves sale, exchange purchase of goods (sugar, pen, soap etc.) and services (transportation, banking, insurance, etc) on a regular basis for mutual profit through the satisfaction of human wants.

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