GMS 402 Lecture 1: GMS402 ch01

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 402
• Professor: Sui Sui

Document Summary

It also helps you understand the market structure and varying form of competition and the regulation of competition in industries: finally, it helps with uncertainty, risk and competitive moves in real world situations. Identify goal and constrains: sound decision making involves having well-defined goals. In striking to achieve a goal, we often face constrains. Total annual costs need to be lower than ,000. Economic vs. accounting profits: accounting profits: total revenue (sales) minus dollar cost of production goods or services. A(cid:272)(cid:272)ou(cid:374)ti(cid:374)g profit is (cid:449)hat sho(cid:449) up o(cid:374) the fir(cid:373)"s i(cid:374)(cid:272)o(cid:373)e state(cid:373)e(cid:374)t a(cid:374)d are typically reported to the (cid:373)a(cid:374)ager (cid:271)y the fir(cid:373)"s a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g depart(cid:373)e(cid:374)t: economic profits: total revenue minus total opportunity cost. Profits signal to resources holders where resources are most highly valued by society. Resources will flow into industries that are most highly valued by society. Profitable industries will attract new entrants creating increased competitions that leads to lower prices for consumers and innovation to maintain and attract new customers.