CMA Foundation · Fundamentals of Business Economics and Management · Means of Production
Meera Textiles in Surat launches a new line of eco-friendly dyed fabrics, a product no competitor in the region offers. Which function of an entrepreneur is mainly illustrated?
The function illustrated is innovation. Launching a new eco-friendly fabric that rivals in the region do not offer is the introduction of a new product, which Schumpeter treated as the key role of an entrepreneur, rather than risk insurance, wage fixing or rent collection.
- AInnovationCorrect
- BRisk-bearing in the sense of insurable risks only
- CFixing wages for labour
- DCollecting rent from landlords
Explanation
Introducing a new product or method is the innovating function associated with Schumpeter. Insurable risks are distinct from uncertainty, and wage fixing or rent collection are not entrepreneurial functions in this case.
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