As per the NCERT Glossary, how many of the following are features of capitalist firms?
(A) Private ownership of means of production
(B) Production for the market
(C) Sale and purchase of labour at a price which is called the wage rate
(D) Continuous accumulation of capital
(E) Production mainly for the consumption of the owner’s own family
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Four
A capitalist firm produces for the market with privately owned means of production and hired labour, and keeps adding to its capital.
(A) Private ownership of means of production — Feature. The means of production are privately owned.
(B) Production for the market — Feature. Output is made to be sold.
(C) Sale and purchase of labour at a price which is called the wage rate — Feature. Workers are hired for wages.
(D) Continuous accumulation of capital — Feature. Profits go into new machinery and factories, so capital keeps growing.
(E) Production mainly for the consumption of the owner’s own family — Not a feature. This describes peasant farms in many underdeveloped countries, where much of the output is consumed by the family.
(A), (B), (C) and (D) are features: four in all.
NCERT (2026-27): Glossary: “Capitalist firms – These are firms with the following features (a) private ownership of means of production (b) production for the market (c) sale and purchase of labour at a price which is called the wage rate (d) continuous accumulation of capital.” “1.2 Context of the Present Book of Macroeconomics … In many underdeveloped countries production (in agriculture especially) is carried out by peasant families. Wage labour is seldom used and most of the labour is performed by the family members themselves. Production is not solely for the market; a great part of it is consumed by the family. …” |