Question

Why is profit motive important to free enterprise?

Answer 1

Answer: A. Business owners and managers make decisions that they believe will  maximize their profits.

Explanation:

Profit motive can be defined as the strategy which helps the business owners and corporations to take appropriate decisions related to profit creation and it prevents the loss by managing the risks associated with the business. For example, if a company makes five different kinds of products but is capable of earning profit on only two then the profit motive view and discussion with support the discard of unprofitable products. As, the unprofitable products are likely to waste the labor cost, time, material used to manufacture the product which will utilize the profit of the profitable products.