ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The purpose of most businesses is to increase profit and avoid losses. That is the driving force behind capitalism and the free market economy. The profit motive drives businesses to come up with creative new products and services. They then sell them to the most people.

Detailed explanation-2: -The profit motive refers to an individual’s drive to undertake activities that will yield net economic gain. Because of the profit motive, people are induced to invent, innovate, and take risks that they may not otherwise pursue.

Detailed explanation-3: -Examples of the profit motive An engineer wants to stop spending money on gasoline and knows they can make money if they patent a new type of fuel. They spend their free time working on a machine that can convert water into energy for their vehicle.

Detailed explanation-4: -Abstract. The profit motive refers to what is generally taken to be the underlying motivation of business and commercial activity: to collect revenues in excess of costs or, more simply, to make money.

Detailed explanation-5: -Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.