Question

Select the correct option based on the two statements seen below.

Statement 1: The main objective of organisation as a factor of production is to coordinate with the remaining factors.

Statement 2: The reward received by an organisation as a factor of production is interest.

• A. Both statements are incorrect.
• B. Statement 1 is correct and statement 2 is incorrect.
• C. Statement 1 is incorrect and statement 2 is correct.
• D. Both statements are correct.

Answer 1

The correct option is B Statement 1 is correct and statement 2 is incorrect.

The main object of organisation as a factor of production is to coordinate between the other three factors namely land, labour and capital. The reward received by the successful coordination of the three is the profits an organisation reaps after the sale of the product.