Chapter 1 Basic Economic Concepts Section 1.2 Business Activities

What is Business? Business: any commercial activity that seeks profit by providing goods and services to others in exchange for money. Businesses provide our wants and needs in exchange for money. Profit: the money left over after a business has paid the cost of providing its goods and services. A business’s main goal is to make a profit. The better a business does, the more it can contribute to the surrounding community through taxes and jobs.

Competition Competition: the contest between businesses to win customers. Customers are a resource to businesses. Competition is possible because companies have the freedom to produce products and services they think will be most profitable Competition is at its greatest in today’s world. High quality vs. Low quality Cheaper vs. More expensive

Business Activities When developing a product or service, a business must: Identify opportunities for products or services Evaluate the demand for products and services Obtain start-up money and operating capital Manage the production of goods and/or services Market the goods and services Keep records to satisfy government requirements and improve processes Businesses use market research to support their activities in developing a product or service. Market Research: the act of gathering and analyzing information about the wants, needs, and preferences of consumers in a certain area.

Business and You Consumer: a person who uses goods or services. Businesses determine what goods and services to provide based on the wants and needs of consumers. Consumers also affect businesses by determining which goods and services they want to buy.

Homework Review questions on page 15, 1-3 1.2 Graphic Organizer Save to S:Drive 1.2 Reading Activity