Which of the following is not one of the features of capitalist economy?
Options
ARight of private property
BFreedom of choice by consumers
CNo profit, No Loss motive
DCompetition
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Introduction to Business EconomicsMTP Oct 20Question 716 of 209
All Questions Correct Answer
✅ Option c — No profit, No Loss motive
All Options:
- ARight of private property
- BFreedom of choice by consumers
- CNo profit, No Loss motive
- DCompetition
Detailed Solution & Explanation
• A capitalist economy, also known as a market economy, is characterized by private ownership of the means of production and operation for profit.
• Let's analyze each option:
• (A) Right of private property: This is a fundamental feature of capitalism. Individuals and businesses have the right to own and control assets, which incentivizes investment and production.
• (B) Freedom of choice by consumers: In a capitalist system, consumers have sovereignty. They are free to choose what goods and services to buy, and their choices guide production decisions by firms.
• (D) Competition: Capitalism thrives on competition among firms. This competition drives innovation, efficiency, and lower prices for consumers.
• (C) No profit, No Loss motive: This statement is incorrect as a feature of capitalism. The primary driving force for businesses in a capitalist economy is the profit motive. Firms aim to maximize profits, and this pursuit of profit guides resource allocation and production decisions. A "no profit, no loss" motive is more characteristic of certain non-profit organizations or a theoretical break-even point, not the overarching goal of a capitalist enterprise.
• Therefore, "No profit, No Loss motive" is not a feature of a capitalist economy. The core principle is profit maximization.
About This Chapter: Introduction to Business Economics
Paper
Paper 4: Business Economics
Weightage
5%
Key Topics
Meaning, Scope, Price Mechanism
This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.
View Official ICAI SyllabusExam Strategy Tip
Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.
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