Which signal should an entrepreneur value most before expansion?
Answer and explanation
Correct answer: Stable demand and manageable cost
Expansion increases fixed costs, operating complexity, capacity needs, and financial exposure. Stable demand gives stronger evidence that customers will continue buying, while manageable costs indicate that the larger operation may remain viable. One unusually strong day, friendly praise, or an unplanned loan is insufficient evidence, so A is the best signal.
Frequently asked questions
What is the correct answer to this question?
Stable demand and manageable cost
Why is this the correct answer?
Expansion increases fixed costs, operating complexity, capacity needs, and financial exposure. Stable demand gives stronger evidence that customers will continue buying, while manageable costs indicate that the larger operation may remain viable. One unusually strong day, friendly praise, or an unplanned loan is insufficient evidence, so A is the best signal.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: MSME and Business Entrepreneurship. Topic: Entrepreneurship Development.
