Why should an entrepreneur estimate costs and expected profit?
Answer and explanation
Correct answer: To understand the feasibility of the business
Cost and profit estimates help an entrepreneur compare expected revenue with expenses such as materials, wages, rent, transport, and marketing. This supports decisions about feasibility, pricing, budgeting, and required finance. These estimates do not directly test product quality, which requires a separate process. Hence, option A is correct.
Frequently asked questions
What is the correct answer to this question?
To understand the feasibility of the business
Why is this the correct answer?
Cost and profit estimates help an entrepreneur compare expected revenue with expenses such as materials, wages, rent, transport, and marketing. This supports decisions about feasibility, pricing, budgeting, and required finance. These estimates do not directly test product quality, which requires a separate process. Hence, option A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: MSME and Business Entrepreneurship. Topic: Entrepreneurship Development.
