Which of the following rewards is associated with entrepreneurship

1. Analyze the question The question asks which reward (payment) goes to the factor of production called entrepreneurship.

2. Explain the concept In Economics, each factor of production earns its own reward:

| Factor of Production | Reward | |---|---| | Land | Rent | | Labour | Wages / Salaries | | Capital | Interest | | Entrepreneur | Profit |

The entrepreneur organizes the other factors of production and takes the risk of running the business. Because the outcome is uncertain, the entrepreneur may make a gain or a loss. Whatever is left after paying rent, wages, interest and other costs is the profit. This is why profit is called a residual reward.

3. Solution: check each option

• A. Salaries: the reward for labour, not entrepreneurship.
• B. Profits: the reward for the entrepreneur, for organizing production and bearing risk. ✔
• C. Interest: the reward for capital.
• D. Rent: the reward for land.

4. Answer The correct option is B. Profits.

5. Exam tip Remember the order L-L-C-E, which stands for Land, Labour, Capital, Entrepreneur, and match it with R-W-I-P, which stands for Rent, Wages, Interest, Profit. JAMB often repeats this matching, so learn it well.