One essential trade-off involving business risk in a market system is reﬂected in which of the following statements?
A) Access to the ﬁrm's proﬁts and gains are open only to those who take on the business risk of the ﬁrm.
B) Those who receive guaranteed payments from the ﬁrm are also guaranteed a share of the ﬁrm's proﬁts.
C) Those who make bad decisions regarding risk will suffer losses; those who decide wisely will gain proﬁts.
D) Those who bear the business risk of the ﬁrm are guaranteed to always gain proﬁts.

Question

Quizplus · Accepted Answer

C  A) In a market system, only those who take on business risk have access to the firm's profits and gains.  C) The trade-off involves the potential for losses if decisions are poor and profits if decisions are wise.

One Essential Trade-Off Involving Business Risk in a Market System