Archive for November, 2009
An organization that produces or distributes a good or service for profit is called business. Profit is the difference between earned income and costs. Every business engages in at least three major activities.
The first activity, production, involves making a product or providing a service. Manufacturing firms produce goods whereas service firms provide assistance to satisfy specialized needs through skilled workers such as doctors, travel agents, entertainers, and taxi drivers. Today the number of service firms far exceeds the number of manufacturing firms. For this reason, it is sometimes said that we live in a service society.
The second activity that businesses are involved in is marketing. Marketing deals with how goods or services are exchanged between producers and
consumers.
The third activity, finance, deals with all money matters related to running a business. Whether a business has one worker or thousands of workers, it is involved with production, marketing, and finance, The price that you pays for catcher’s mitt will be based in large part upon supply and demand for the glove. Supply of a product refers to the number of similar products that will be offered for sale at a particular time and at a particular price. Demand, on the other hand, refers to the number of similar products that will be bought at a given time at a given price.