RSM219H1 Study Guide - Midterm Guide: Gross Domestic Product, Gross National Product, Planned Economy
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RSM219H1 Full Course Notes
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A business is an organization that produces or sells goods or services in an effort to make a profit. Wants or needs: not all organized efforts are business. I. e. church, temple, mosque, sports leagues: provides something for someone. People don"t start churches in order to make a profit: businesses are motivated by profits. What you pay is more than what they spent to make/provide the product. Therefore they make a profit: profit is the difference between: 22068$ in (revenues or sales) and 22068$ out (costs and expenses: profit is the fundamental reason for businesses to exist. Profit is what remains after a business" expenses have been subtracted from its revenues. Expenses are the money a business spends producing its goods and services and generally running the business. Revenues are the money the business earns selling its products or services. An economic system is the way in which a nation allocated its resources among its citizens.
