The Bottom Line
This is the monetary reward a business owner receives for taking the risks involved in an investment.
What is Profit?
This term describes the money spent specifically to keep a business running.
What are Operating Expenses?
This phrase describes a popular product that many consumers want to purchase.
What is "In Demand"?
Working faster or better allows an employee to increase this specific metric for the firm.
What is Efficiency?
This type of competition occurs between businesses that offer very similar products, such as Southwest Airlines and United Airlines.
What is Direct Competition?
In business terms, this term refers to all the money received by a firm.
What is Income?
This specific cost refers to the money paid for raw materials and the actual products sold.
What is Cost of Goods?
This is the target group a business seeks out every time it offers a new product.
Who are Buyers?
Profitable businesses often improve their local communities by contributing to these specific causes.
What are Charitable Causes?
When a business uses coupons, rebates, or clearance sales to attract customers, they are engaging in this.
What is Price Competition?
When a business’s expenses are greater than its income, this is the specific "return" that the owner fails to receive.
What is a Reward?
To calculate this figure, a business owner finds the difference between the total money spent and the total money received.
What is Gross Profit?
Businesses must be careful with price hikes because higher prices might cause them to lose sales to these people.
Who are Competitors?
This is a general benefit that profit provides to workers, along with better employment opportunities.
What are Better Wages?
A bowling alley and a sandwich shop are examples of this type of competition because they compete for the same consumer dollars but offer different products.
What is Indirect Competition?
This is the money a business owner gets to keep and use for other things after all costs are paid.
What is Net Profit?
To use resources wisely and maximize profit, business owners must focus on reducing this during production.
What is Waste?
This type of economic environment exists when people are out of work and cannot afford "extra" purchases.
What is a Bad Economy?
Besides financial motivation, profit provides an owner with this internal feeling of fulfillment from serving their community.
What is Satisfaction?
Offering 24-hour service, free delivery, or extended warranties are all examples of this strategy to win customers without lowering prices.
What is Nonprice Competition?
If this situation continues for an extended period, a business is eventually forced to shut down.
What is an Absence of Profit (or no profit generated)?
These are the two primary factors affecting profit that a business owner can usually control.
What are Expenses and Pricing?
Every individual purchase made by a consumer strengthens the economy by encouraging this activity.
What is Trade?
hese are the two specific "I" and "D" activities most likely to increase a firm’s overall profit.
What are Increasing sales and Decreasing expenses?
By advertising a "New and Improved" formula or the largest selection of a product, a company is using this specific nonprice tactic.
What is Product Differentiation?