Q1. Explain Concept of Business Risk.
Ans. It refers to possibility of inadequate profits or even losses due to unexpected events.
Example: Demand for particular product may decline due to change in taste or due to increasing competition among producers. Lower demands results in long sales and profits. In other situations, shortage of raw material in market may shoot up its prices. As a result cost of production may increase which may reduce profits.
- Types of Business Risk
- Causes of Business Risk