The distinguishing function of an entrepreneur is_______

1. Analyze the question The question asks which function sets the entrepreneur apart from the other factors of production, especially labour and management.

2. Explain the concept The entrepreneur is the factor of production that organizes land, labour, and capital to produce goods and services. Entrepreneurs do several things:

• Plan the business
• Organize resources
• Control or supervise operations
• Make decisions
• Bear the risk of loss or uncertainty

Many of these tasks, such as planning, control, and management, can be delegated to hired managers. Risk-bearing cannot be passed on. The entrepreneur invests their own money and effort without knowing whether the business will make a profit or a loss. Profit is the reward for this risk, while wages go to labour and interest to capital.

3. Solution, option by option

• A. Planning: Managers and other employees also plan, so it is not unique to the entrepreneur.
• B. Control: Supervisors and managers also control operations.
• C. Risk-bearing: Only the owner of the enterprise carries the uncertainty of profit or loss. This is the distinguishing function.
• D. Management: A salaried manager can handle this, and many companies are run by managers who are not the owners.

4. Answer The correct option is **C.

5. Exam tip Remember the link: Entrepreneur → Risk → Profit. If a question asks what is unique or distinguishing about the entrepreneur, think of risk-bearing. Questions on the reward for each factor often follow this pattern: land gets rent, labour gets wages, capital gets interest, and the entrepreneur gets profit.