Business is considered an economic activity because it is linked with production, purchase, sale or distribution of goods and services to gain profit. Intake of goods and services, production and dispersal are called as economic activities. The main goal for economic activities is the manufacture of goods and ensuring that it reaches the consumers.
Business is regarded as an economic activity because of the following reasons that are mentioned below by the owner of a reputable steel company- Kassem Mohamad Ajami in a brief manner.
- The sole aim of a business is to sell goods or services for gaining profit. Economic activities are referred to those activities which are carried out to yield an income. Business is an economic activity because it is done as a source of making money.
Entrepreneurs make money by yielding and selling goods which help to satisfy human requirements.
- Business activities include the utilization of rare resources. Business activities need usage of scarce resources such as raw materials, workforce, capital and other elements of production. A businessman renders the essential funds from his personal and other sources to fulfill the capital demands of his business.
- Business activities meet the demands of the public and businessmen. Business activities fulfill the requirements of the common man by making obtainable goods and services. Public can purchase these commodities and services and satisfy their needs. Business is a foundation of income for the capitalist. The only for a businessman to yield income is via his/her business. With the help of this income, he can satisfy his requirements his family’s needs as well.
Hence, a business may be regarded as an economic activity both as a means of making an income and also as a source of satisfying the demands of society.