In a market economy, the main incentive for entrepreneurs to take risks is the potential for:

• A. reduced competition
• B. profit
• C. job security
• D. government subsidies

Answer: (B)

Verified step by step guidance

1. Understand the role of entrepreneurs in a market economy: Entrepreneurs take risks to create and run businesses, aiming to provide goods or services to consumers.
2. Identify what motivates entrepreneurs to take these risks: In a market economy, incentives are typically linked to rewards that compensate for the uncertainty and effort involved.
3. Consider the options given: reduced competition, profit, job security, and government subsidies, and analyze which aligns best with the economic theory of entrepreneurship.
4. Recall that profit is the financial gain entrepreneurs seek, which serves as the primary incentive for taking risks, as it rewards successful innovation and business operation.
5. Conclude that among the options, profit is the main incentive for entrepreneurs to take risks in a market economy, as it directly motivates them to innovate and compete.