| A | B |
|---|
| profit | monetary reward for risk |
| income | Money received in business |
| profit motive | why start businesses |
| Serve community | personal reason to start business |
| Sales | source of income |
| Utilities (electricity) | example of operating expense |
| Cost of goods | raw materials and products sold cost |
| Gross Profit | difference between spent and received |
| Operating Expense | expenses to run business |
| Net Profit | gross profit minus expenses |
| Trade | How each purchase strengthens the economy |
| Benefits Society | business conserve resources |
| General benefits to entire trading environment | Meet consumers wants/needs, better wages |
| Expand operations | why companies reinvest |
| profits decrease | what happens when D goes down |
| expenses and pricing | factors business have most control of |
| External factors | Demand, economy, Chance |
| prosperity | Phase when buniesses most likely to be profitable |
| chance | profit affected by this luck |
| guaranteed | Profit is NEVER this |
| efficiency | employees working faster or better |
| increasing sales | displays and sales might do this |
| no free services | way to cut cost |
| Helps community | Businesses give to charities |
| Demand | This desire for the product affects profit |
| Pricing decsions | It is wise to lresearch these or what people will pay |
| Benefits to business owners | satisfaction and motivation |
| Zero profit | When expenses are greater than income |
| Two types of expenses | COGS & Operating Expenses |
| Formaula for gross profit | Sales minus COGS |
| Importance of net profit | shows business owners what $ they can keep |
| Businesses that make a profit | They build facilities, expand, give to charity, add new lines, etc. |
| Shut Down | What happens eventually if no profit is made |
| Bad economy | A time when consumers are unemployed and can't afford much |
| increasing sales & decreasing expenses | 2 things most likely to increase profit |
| Resources | what must be used wisely to reduce waste |
| Buyers | WHat businesses seeek for every new product |
