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Why can diversity of revenue sources be beneficial in an enterprise?

Answer and explanation

Correct answer: If one source weakens, another may provide support

Relying on only one revenue source makes the enterprise vulnerable if demand, prices, or market conditions change. Different sources can provide a more balanced and stable inflow, although they do not remove all risk. Accounts and customer understanding remain necessary. Thus, option A correctly explains the risk-management benefit of revenue diversification.

Related tags

Revenue StreamsRisk ManagementIncomeEntrepreneurship DevelopmentMsme And Business EntrepreneurshipBusiness StudiesClass 11 Mcq

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