Q.Explain the economic objectives of a business enterprise.

Economic objectives are the objectives directly tied to a business's own commercial survival and growth, covering profit, customers, innovation, and resource use.

Each of the four objectives should be explained with what it means and why it matters to the business's survival and growth.

Economic objectives are the objectives concerned directly with a business's own commercial survival and growth. Section 2 identifies four such objectives:

1. Earning profit. Profit is the surplus remaining after a business meets all its expenses from its revenue. It is a necessary objective because it rewards the entrepreneur for the risk and uncertainty of running the business, supplies internal funds for survival during difficult periods and for future expansion, and signals that the business is being run efficiently. Profit, however, is a means to survival and growth — not the business's only legitimate purpose.

2. Creation and maintenance of customers. A business exists only because customers buy what it offers. "Creating" a customer means attracting a first-time buyer; "maintaining" them means keeping them satisfied enough to become a repeat buyer and recommend the business further. Continued customer relationships, not one-time sales, sustain a business over the long run.

3. Regular innovation. Innovation means continually introducing something new or improved — a new product, an improved version of an existing one, a better production method, or a better way of reaching customers — so the business does not lose customers to competitors offering something better, cheaper, or more convenient.

4. Optimum utilisation of resources. A business draws on four resources — men, money, material, and machines (the "4 Ms"). Optimum utilisation means combining these resources in the best possible way to achieve maximum output with minimum waste, which keeps costs down and supports both profit and fair pricing.

Together, these four economic objectives form the essential commercial foundation that allows a business to remain viable enough to also pursue its social, human, national, and global objectives.