Profits are the reward for-

bearing uncertainty
bearing risks
parting with time preference of consumption
avoiding and absorbing non-insurable risks and uncertainties

The correct answer is: A. bearing uncertainty.

Profits are the reward for bearing uncertainty. This is because businesses are constantly faced with uncertainty, such as changes in the economy, customer demand, and the prices of inputs. When a business is successful in managing uncertainty and making a profit, it is rewarded for its risk-taking.

Option B is incorrect because risks can be mitigated through insurance or other risk-management strategies. Option C is incorrect because time preference of consumption is the idea that people prefer to consume goods and services now rather than in the future. This is not a risk that businesses face. Option D is incorrect because businesses can avoid and absorb non-insurable risks and uncertainties through hedging or other risk-management strategies.

In conclusion, profits are the reward for bearing uncertainty. This is because businesses are constantly faced with uncertainty, such as changes in the economy, customer demand, and the prices of inputs. When a business is successful in managing uncertainty and making a profit, it is rewarded for its risk-taking.

Exit mobile version