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Why is understanding demand and supply important for an entrepreneur?

Answer and explanation

Correct answer: To make correct decisions about production and pricing

Demand indicates the quantity customers may want and be able to buy, while supply indicates the quantity available from producers or sellers. Understanding both helps an entrepreneur estimate sales, plan production and inventory, and choose a reasonable price. It does not mean ignoring customers, always storing excess stock, or abandoning planning. Therefore, option A is the correct business use.

Related tags

DemandSupplyPricingEntrepreneurship DevelopmentMsme And Business EntrepreneurshipBusiness StudiesClass 11 Mcq

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