In the words of Peterson and Plowman, “Business may be defined as an activity in which different persons exchange something of value, whether goods or services, for mutual gain or profit”. Though profit making is an important objective of any business, it should not be the sole objective of business. Easy to Form and can be started with Minimal Legal Formalities except in a few cases. However, exchange does not include goods donated or gifted to someone. Business could be local or it could be Global. Example: A business house tries to reduce the cost of production and the cost of raw material to earn high profits. For carrying on a successful business venture, it is very important to manage human resources efficiently. Everyone wants to build a house and start a new family under that roof. No business can survive for long without earning profit. For example, Rajesh is doing a wholesale business of artificial plants in Delhi. Business activities possess the following characteristics: 1. There is a contract instead of a code of conduct. So it is normative in nature. A single transaction cannot be called business, recurring purchase and sale is the hallmark of business, For instance, if a person sells his old scooter, it is not business. Whereas, his cousin Arun imports glassware and sells them through his outlet in the same market. (B) There are three types of economic activities. – Stenford. A business transaction is a result of an agreement; hence the presence of two parties is a must. Income is calculated using the Atlas method (in current U.S. dollars). In their absence, business cannot take place. Business is an institution organised and operated to provide goods and services to society under the incentive of private gains. business. Saving, Investment etc. Your email address will not be published. In a modern business scenario, the government possesses a crucial role to play. 6. Service motive – No business can succeed if there is no attitude of social service. Uncertainty of return refers to the lack of knowledge relating to the amount of money that the business is going to earn in a given period. Business refers to activities involving production or purchase and then sale of goods desired by the people, with the intention of earning profit. Characteristic # 6. For example, a farmer grows rice, and keeps it for his family consumption. Coronaviruses square measure a family of viruses which will cause diseases like the respiratory illness, severe acute metabolism syndrome (SARS) and Near East metabolism... What Is Cancer? An isolated transaction cannot be called as business. Economics as a Science of Development & Growth: Paul Samuelson 12 Main Characteristics of Development and Growth Definition 12 Which of these Definitions is the Best? Share Your PPT File. CHARACTERISTICS OF BUSINESS ECONOMICS. The unit of study of business economics is the firm. Managerial Economics is both conceptual and metrical. However the scope of macroeconomics includes various Yet it does not relegate the realities of business decision-making to the background by bringing in abstract assumptions. The goods can be of two kinds – (a) Consumer goods (e.g. The conduct of industry or business always involves a certain amount of risk and uncertainty of return to the entrepreneur. The education of economics is, thus, a summary of theorization with little connection to the business. Services are intangibles, such as supply of electricity, insurance, banking, etc. The goods or services may either be for consumption by consumers or for use in manufacture by producers. 3. For example, wheat produced by farmers, needs to be transported to markets so as to reach the consumers. A Business cannot exist without an Entrepreneur and hence is called an “Enterprise”. The term business literally means, ‘being busy’. Regularity in dealings is one of the key feature of a business activity. Share Your PDF File The goods may be consumers’ goods such as bread, rice, cloth, shoes, etc. For example, if a person sells his house and earns profit, it is not business because it is not done on a regular basis. Any activity or transaction that is required to complete the process of making goods or services available for a price to the consumers is called a business activity. Services are those intangible and invisible goods supplied by business concerns which cannot be stored by the consumer. 2. It does not study the problems of the entire economy. This section of society is willing to pay more for a product that maximizes their satisfaction. In business there have to be dealings in goods and service. But the same may not have any value when lying in abundance. Business has to be dynamic in order to respond to such a changing environment. 4. On the other hand, when goods exchanged for some other goods is called Barter Exchange. Goods and services are produced to fulfil the requirements of customers. Managerial Economics is mainly micro in nature. An enterprise economist has the following duties with regards to the production: Decide on the most suitable dimension of output primarily based on the targets of the firm.Also, make certain that the association does now not incur any undue costs.By production analysis, the association can pick the fantastic technological know-how providing a technically environment-friendly way of producing the output.
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