Objectives of Business — Flashcards

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Business is considered an economic activity because it uses scarce resources efficiently, exchanges goods and services, creates utility, aims at profit, and satisfies human needs. It is not just about…

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Business is an activity undertaken to produce, distribute, and exchange goods and services with a view to earn profit. It is linked with income generation and the satisfaction of human needs.

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It means using labour, materials, capital, and machinery carefully so that waste is reduced and production is done in the best possible way. Since these resources are limited and costly, business must…

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Business creates form utility, place utility, and time utility. Form utility is created when raw materials are changed into finished goods. Place utility is created when goods are moved from producer …

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Form utility is the utility created when raw materials are converted into finished goods. For example, cotton is changed into cloth, or wood is made into furniture. Business adds value by changing the…

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Place utility is created when goods are moved from the place of production to the place of use. For example, transporting wheat from a farm to a city market increases its usefulness to consumers.

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Time utility is created when goods are stored and made available when demand arises. For example, storing grains in warehouses so they can be sold later creates time utility.

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Many people enter business to earn income and support their livelihood. Profit acts as an important motive because it gives purpose to business activity and encourages effort, planning, and growth.