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.
Frequently asked questions
What is the correct answer to this question?
To make correct decisions about production and pricing
Why is this the correct answer?
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.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: MSME and Business Entrepreneurship. Topic: Entrepreneurship Development.
