Question

The income of which factor of production is called profit?

• A. Labour
• B. Capital
• C. Land
• D. Entrepreneur

Hint:

Profit is the income earned by the entrepreneur for taking risks and organizing the other factors of production.

Answer 1

The Correct Option is D

Step 1: Understanding the factors of production.
In economics, the factors of production are the resources used to produce goods and services. These include labour, capital, land, and entrepreneurship. Profit is the income earned by the entrepreneur from organizing and managing the production process.

Step 2: Analyzing the options.
(A) Labour: Labour earns wages, not profit.
(B) Capital: Capital earns interest or rent, not profit.
(C) Land: Land earns rent, not profit.
(D) Entrepreneur: Correct. Entrepreneurs earn profit as a reward for taking risks and managing production.

Step 3: Conclusion.
The correct answer is (D) Entrepreneur, as entrepreneurs earn profit for organizing production and taking risks.