Under the point ‘government intervention’, which of the following shows the correct chain of cause and effect?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Exploitative trade practices → government action → image of the company tarnished
Option (1) Exploitative trade practices → image of the company tarnished → government action — Incorrect. The last two steps are the wrong way round. The image is tarnished because of the government action, so the action comes first.
Option (2) Exploitative trade practices → government action → loss of repeat sales — Incorrect. The first two steps are right, but the effect named under this point is a tarnished image. Repeat sales belong to the point long-term interest of business.
Option (3) Exploitative trade practices → government action → image of the company tarnished — Correct. A business that uses exploitative trade practices invites government action. This action can impair and tarnish the image of the company. So it is better for a business to take care of customers’ needs on its own.
Option (4) Loss of public confidence → image of the company tarnished → government action — Incorrect. Under this point the chain begins with exploitative trade practices. Public confidence is spoken of under the point business uses society’s resources.
NCERT (2026-27 Edition): “(i) Long-term Interest of Business: Enlightened businesses realise that it is in their long-term interest to satisfy their customers. Satisfied customers not only lead to repeat sales but also provide good feedback to prospective customers and thus, help in increasing the customer-base of business. Thus, business firms should aim at long-term profit maximisation through customer satisfaction.” “(ii) Business uses Society’s Resources: Business organisations use resources which belong to the society. They, thus, have a responsibility to supply such products and render such services which are in public interest and would not impair public confidence in them.” “(v) Government Intervention: A business engaging in any form of exploitative trade practices would invite government intervention or action. This can impair and tarnish the image of the company. Thus, it is advisable that business organisations voluntarily resort to such practices where the customers’ needs and interests will well be taken care of.” |