In a capitalist economy, profit is socially desirable because it:

CA Foundation · Business Economics · MTP · June 2024
In a capitalist economy, profit is socially desirable because it:
(A) A. reallocates wealth from small firms to large firms.
(B) B. attracts resources to the most desirable types of production.
(C) C. allows firms to operate at higher levels of cost.
(D) D. permits firms to hire more workers and thereby reduces the unemployment rate.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. attracts resources to the most desirable types of production.

Topics: Nature & Scope of Business Economics

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic