Question

• Summarize what entrepreneurs do.

  
  

  Examine how free-enterprise economies work and how entrepreneurs fit into them.

  
  

  Identify and evaluate opportunities to start your own business.

  
  

  Explain how profit works as a signal to the entrepreneur.

Answer 1

Ans 1=An entrepreneur   assumes the risk of the enterprise & searches for opportunities to profit by fulfilling the unsatisfied needs of the consumers.

An entrepreneur tries to find disequilibrium-the hiatus between the needs of consumers & the commodities which are available presently. He thereafter brings together the other factors of production like labour , capital etc required to manufacture, offer & sell desired commodities. He invests & risks his funds--and those of other investors--to manufacture a commodity which can be sold for a profit.

Ans 2= If successful, the innovations of entrepreneurs may enhance the standard of living of the people. In addition to wealth creation via their entrepreneurial ventures, entrepreneurs also create employment & the conditions necessary for a prosperous society.

Ans 3=

• Does your business proposal have an obvious market requirement?
• Is there ample demand for the proposed commodity?
• Is creating the commodity economically feasible?
• Will there be a adequate return on the investment of initiating a new venture?
• Estimating the cost of NOT taking up this business opportunity

Ans 4= Profits work as an indicator to the entrepreneur in many ways. Most entrepreneurs initiate business ventures to solve problems, give alternatives to customers or satisfy requirements which are not being fulfilled. They develop business proposals around their conceptions & then execute them. Profits serve as a guide for how entrepreneurs market / promote their products / services. Entrepreneurs expand on their ideas if they are successful / alter marketing strategies if profits prove inadequate as compared to their projections.