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Define the factor of production 'Enterprise' - Leaving Cert Economics - Question 3 - 2008
Question 3
Define the factor of production 'Enterprise'. Outline two characteristics which make 'Enterprise' a unique factor of production. Do all entrepreneurs earn the same... show full transcript
Worked Solution & Example Answer:Define the factor of production 'Enterprise' - Leaving Cert Economics - Question 3 - 2008
Step 1
Step 2
Outline two characteristics which make 'Enterprise' a unique factor of production.
Answer
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It can earn a loss: Unlike other factors of production, enterprise can incur a negative return due to business risks. Other factors are typically guaranteed a return.
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Returns can vary: The returns on enterprise are not fixed and can range from significant profits to losses, contrasting with the contractual or agreed returns of other production factors.
Step 3
Do all entrepreneurs earn the same level of profit? Explain your answer.
Answer
No, all entrepreneurs do not earn the same level of profit. Variations in profit arise due to differences in entrepreneurial ability, talent, and business acumen. For instance, an entrepreneur in a highly competitive industry may earn lower profits compared to one in a less competitive environment or with exceptional talent.