Question

Write short answers of the following

State the features of business

Answer 1

The following are some of the major features of a business:
i. Economic activity: As a business is carried out with the sole objective of earning profit, it is characterised as an economic activity.

ii. Procurement of raw materials: Business involves procurement of raw materials and semi-finished goods which are then processed further into final goods. These final goods are then sold to the end consumers at higher prices. (It must be noted that resale of goods and services on a regular basis also constitutes business.).

iii. Profit motive: Earning profit forms the most important objective of all the business activities as without profit, no business can sustain for long period.

iv. Exchange on regular basis: The exchange of goods and services is done on a regular basis. A single or only a few transactions of exchange do not constitute a business.

v. Business risk: Every business, irrespective of its size (large or small) and the types of goods it deals in, faces business risks (in the form of loss).