1. Profit Motive: Business means production, purchase and sale of goods with profit motive. Earning profit for satisfying needs make the business an economic activity.

2. Business activities require use of scarce resources: To run business concern the owner must have adequate capital, raw materials, skilled workers. Business requires sufficient funds to be invested in it. All these activities involve monetary transactions. So business is an economic activity.

3. Satisfying human wants: Business is a source of income for businessmen and their families. Business can, therefore, be regarded as an economic activity not only as a means of earning income by businessmen but also as a means of satisfying the wants of people.