One single transaction of sale or purchase, therefore, does not constitute business. Prices are thereby maintained at a reasonable level through continuous supply of goods. The obstacle of place is removed by transport through road, rail or coastal shipping. When goods are purchased and sold in comparatively smaller quantities, for final consumption it is referred to as retail trade. For the breeding of plants, the seeds and nursery companies are typical examples of genetic industries. The entrepreneur must carefully consider and decide the physical requirements on the basis of the nature and production scale of the business. The occupation in which people work for others and get remunerated in return is known as, 5. No business enterprise can flourish in a competitive world without innovation. No business can avoid risk, although the amount of risk may vary from business to business. Insurance provides protection in all such cases. → Degree of risk depends mainly upon the nature and size of business. Risk is the uncertainty associated with an exposure to loss. Profit may be regarded as an essential objective of business for various reasons: it is a source of income for business persons. Get step by step NCERT solutions for Class 11 Business-studies Chapter 1 -nature-and-purpose-of-business . Social responsibility refers to the obligation of business firms to contribute resources for solving social problems and work in a socially desirable manner. If goods are produced not for the purpose of sale but say for personal consumption, it cannot be called a business activity. (iv) Profit is the reward for risk taking: ‘No risk, no gain’ is an age-old principle which applies to all types of business. Profitability refers to profit in relation to capital investment. Risk can be minimized, but cannot be eliminated. Transport removes the hindrances of place by moving goods from the places of production to the markets for sale. Grade 11 Business Studies is not a very simple subject to master; however, the way the bst Notes Class 11 chapter 1 study Notes is presented to you, makes a huge difference in how well and fast the student learns. (iii) Degree of risk depends mainly upon the nature and size of business: Nature of business and size of business are the main factors which determine the amount of risk in a business. Businessmen are engaged in trading activities as middlemen to make the goods available to consumers in different markets. (I) Business risks arise due to uncertainties: Uncertainty refers to the lack of knowledge about what is going to happen in the future. 3. A business enterprise must aim at standing on stronger footing in terms of offering competitive products to its customers and serving them to their satisfaction. Trade is an essential part of commerce. Buying and selling of goods is termed as trade. Business persons themselves proclaim that their primary objective is to produce or distribute goods or services for a profit. CBSE Business Studies Chapter 1 Nature and Purpose of Business in PDF format are available for free download in myCBSEguide mobile app. Every enterprise needs competent and committed work force to perform various activities so that physical and financial resources are converted into desired outputs. Class XI Chapter 1 Business Studies, Nature and Purpose of Business , study notes and study material to learn and revise your chapter. On payment of a nominal premium, the amount of loss or damage and compensation for injury, if any, can be recovered from the insurance company. Class 11 Business Studies Notes Chapter 1 Nature and Purpose of Business. Economic activities are those by which we can earn our livelihood whereas non-economic activities are those performed out of love, sympathy, sentiments, patriotism, etc. No business can altogether do away with risks. The nature of business risk are: → Business risks arise due to uncertainties. Go to NCERT Solutions of Business Studies Class 11th With the help of Notes, candidates can plan their Strategy for particular weaker section of the subject and study hard. Employees are also required to be protected against the risks of accident and occupational hazards. About Us | How would you classify business activities? Objectives refer to all that the business people want to get in return for what they do. Describe the activities relating to commerce. It includes all those activities, which are necessary for maintaining a free flow of goods and services. Proper financial planning must be done to determine, source from which capital will be raised and. It is generally believed that business activity is carried on only for profit. Nov 21, 2020 - Chapter Notes (Part - 1) - Nature and Purpose of Business, BST, Class 11 | EduRev Notes is made by best teachers of Commerce. Speculative risks arise due to changes in market conditions including fluctuations in demand and supply, changes in prices or changes in fashion and tastes of customers. 2. (a) Production of goods and services (b) Presence of risk (c) Sale or exchange of goods and services (d) Salary or wages (d) Salary or wages 2. Obsessed with profit, business managers may neglect all other responsibilities towards customers, employees, investors and society at large. 7. One of the main purposes of business is to earn income by way of profit. → Advertising: It is one of the most important methods of promoting the sale of products, particularly, consumers goods like electronic goods, automobiles, soaps, detergents etc. 1. Every business invests money (capital) to run its activities with the objective of earning profit. The industries which provide support services to other industries are known as. Commerce provides the necessary link between producers and consumers. Extractive industries supply some basic raw materials that are mostly products of geographical or natural environment. The term ‘business risks’ refers to the possibility of inadequate profits or even losses due to uncertainties or unexpected events. Important extractive industries include farming, mining, lumbering, hunting and fishing operations. Some factors favor a large size whereas others tend to restrict the scale of operation. 7. Hence, commerce is said to consist of activities of removing the hindrances of persons, place, time, risk, finance and information in the process of exchange of goods and services. Insurance covers various kinds of business risks. 3. Which of the following does not characterize a business activity? Business involves various types of risks. Assembling industry which assembles different component parts to make a new product, as in the case of television, car, computer, etc. Manufacturing industries may be further divided into four categories on the basis of method of operation for production. Download Revision Notes for CBSE Class 11 Business Studies.Short notes, brief explanation, chapter summary, quick revision notes, mind maps and formulas made for all important topics in Business Studies in Class 11 available for free download in pdf, click on the below links to access topic wise chapter notes based on 2020 2021 syllabus and guidelines issued for Grade 11. Provision of goods and services to the public. Also, we will understand the differences between business, profession, and employment. Products of these industries are usually transformed into many other useful goods by manufacturing industries. Why is business considered an economic activity? (viii) Competent and committed worked force: Preparing for IIT JEE or AIPMT or CA CPT, © Copyright Pivotal | An important factor to be considered at the start of the business is the place where the enterprise will be located. Thus, for example, if a person sells his/her domestic mobile even at a profit, it will not be considered a business activity. It indicates the efficient working of business. The first thing to be decided by any entrepreneur of a new business is the nature and type of business to be undertaken. However, it is being increasingly realized nowadays that business enterprises are part of society and need to have several objectives, including social responsibility to survive and prosper in the long run. Advertising makes it possible for producers and traders to inform consumers about the goods and services available in the market. (d) It can be taken as society's approval of the utility of business. Economic activities may be further divided into three categories, namely. → Commerce: It does not involve manufacturing or production. 4. Necessary funds can be obtained by businessmen from a bank. Making money is the sole purpose of any business. Most of these goods are manufactured and supplied in the market by numerous firms — big or small. Which would mean mobilizing various resources, fulfilling necessary legal formalities, starting the production process and initiating the sales promotion campaign.

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