Why should an entrepreneur understand cost?
Answer and explanation
Correct answer: To make correct decisions about price, profit, and expenses
Cost is the expenditure incurred to produce a good or provide a service. Knowing fixed, variable, and total costs helps an entrepreneur set a viable price, estimate profit, prepare a budget, control waste, and decide whether an activity is feasible. Ignoring cost can cause underpricing or losses, so A is correct.
Frequently asked questions
What is the correct answer to this question?
To make correct decisions about price, profit, and expenses
Why is this the correct answer?
Cost is the expenditure incurred to produce a good or provide a service. Knowing fixed, variable, and total costs helps an entrepreneur set a viable price, estimate profit, prepare a budget, control waste, and decide whether an activity is feasible. Ignoring cost can cause underpricing or losses, so A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Sources of Business Finance. Topic: Concept, nature and importance of business finance.
