The Nature And Purpose Of Economic Activity

• As we live our lives we interact with businesses (enterprises) on a daily basis
• The shop from which we buy bread and other groceries
• The vendor who sells us vegetables
• As is already apparent to you, businesses take many forms
• However, all businesses have some things that are common to them
• These elements can be used to define what a business is
• There are many ways to define what a business is
• A business is when someone ( or a group of individuals) working together in an organised way to achieve a certain purpose
• We must add here that businesses and enterprises are one and the same thing
• So a business also involves an entrepreneur combining the factors of production to satisfy needs and wants
• As mentioned above there are two key elements of a business:
  • It has to be an organised and conscious effort
  • Secondly, there has to be set purpose(s) or objectives that the business owners intend to achieve
• For most businesses, the overriding aim is to make a profit and increase the wealth of the owners(proprietors)
• However, there are other business objectives besides these

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