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What problem may occur if an entrepreneur overestimates demand?

Answer and explanation

Correct answer: Overproduction, unsold stock, and blocked money

Overestimating demand may lead the entrepreneur to produce more goods than customers actually want. Unsold stock then occupies space, may become obsolete, and ties up money that could have been used elsewhere. Options B, C, and D are not automatic results of a high estimate; sales and profit still require real customers.

Related tags

Business RiskDemand EstimationBusinessTrade And CommerceBusiness Trade And CommerceBusiness StudiesClass 11 Mcq

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