If an entrepreneur increases production without market study, what is the risk?

Correct answer: Money and material may get stuck due to no sales

Direct answer: Option A, money and material may get stuck because of no sales. Market study tells an entrepreneur about customer needs, likely demand, competition, price and suitable production quantity. If production is increased without this information, the business may make more goods than customers want. The goods remain unsold, money is blocked in stock, storage costs may rise and materials or products may spoil or become outdated. Option A is correct because it describes the direct financial and resource risk. Option B is wrong because customers do not automatically double when production rises. Option C is wrong because producing more without study increases, rather than removes, risk. Option D is wrong because costs do not automatically fall; extra production can increase material, labour and storage costs. Memory cue: study demand before increasing supply.