Question

The concept of ‘fair profit’ is what a business should focus on. Give reason.

Answer 1

Profit is the lifeline and prime motive behind a business.

• Every businessman has the right to earn a profit. However, with an aim to earn high profits in this greedy world the businessman may tend to compromise on his product quality or service, take undue advantage of customer’s ignorance, or even charge unreasonably high from his customers. In other words, he runs towards profit maximization at any cost.
• Today, the customer is well-in formed, aware, literate, has other options for a product and protected by several laws.
• Under such circumstances aiming for very high profits can be very harmful in longer run.
• A businessman that aims at a fair or say reasonable profit can satisfy his customers and employees better, survive and slowly grow too.
• Hence, the concept of ‘fair profit’ is widely accepted.