Gayathri recently opened a store specializing in custom embroidery. She has sunk most of her life savings into the company, but unfortunately competition is keeping her from making money. If things don't change, Gayathri will likely need to close her store. Which drawback of capitalism does this best represent?
A) possibility of heavy losses
B) too many goods and services
C) lower income expectations
D) exploitation
E) lack of demand

Question

Quizplus · Accepted Answer

The scenario with Gayathri facing the possibility of closing her store due to competition and not making money highlights the drawback of capitalism related to the possibility of heavy losses. In a capitalist economy, businesses face the risk of financial loss, which can be significant for small business owners who invest their savings.

Gayathri Recently Opened a Store Specializing in Custom Embroidery