What social function is served by profits in a free-enterprise system?
A) Taxes on profits support government programs.
B) They provide an incentive for the reallocation of resources.
C) Profits allow individuals to accumulate wealth and engage in capital investment.
D) Profits result in higher levels of employment.

Question

Quizplus · Accepted Answer

Profits serve as a signal and incentive for businesses to allocate resources efficiently, directing them towards more profitable and productive uses in a free-enterprise system.

What Social Function Is Served by Profits in a Free-Enterprise