question_answer

Under what conditions will an entrepreneur setting up a cane crushing and jaggery manufacturing unit in a village suffer a loss?                                                 (3)  

Answer:

Conditions under which he may face a loss can be (i) If his crushing machine becomes defective, his production will reduce or totally stop. (ii) If due to drought, the supply of sugarcane reduces, his jaggery production will come down, leading to a loss for him. (iii) If demand for jaggery decreases, he will not be able to sell enough to break even. (iv) If other costs like electricity, labour or transportation costs increase, he may face a loss.