Which of the following guides sensible decisions regarding the management of business risk in a market system?
A) the proﬁt and loss system
B) the "invisible hand"
C) taxes and subsidies
D) consumer sovereignty

Question

Quizplus · Accepted Answer

The profit and loss system guides sensible decisions regarding the management of business risk in a market system because it provides an incentive for businesses to minimize their risks and maximize their profits. Businesses that make good decisions are rewarded with profits, while those that make poor decisions suffer losses. This incentivizes businesses to carefully consider the risks they take on and make decisions that are in the best interest of their long-term success.

Which of the Following Guides Sensible Decisions Regarding the Management