Profits and losses in a private enterprise economic system

Question

Quizplus · Accepted Answer

Profits and losses in a private enterprise economic system provide important signals for entrepreneurs to allocate resources in the most productive way. Profits indicate where resources should be expanded, while losses indicate where resources should be contracted. This helps to ensure that resources are allocated efficiently and that the economy as a whole operates in a sustainable manner. The other options do not accurately describe the role of profits and losses in a private enterprise economic system.

Profits and Losses in a Private Enterprise Economic System