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Chapter 1

Basic EconomicConcepts

Section 1.2

Business Activities

Read to Learn

Explain how profit and competition motivate businesses.

List the activities businesses undertake when developing products and services.

Explain how business impacts you and how you impact business.

The Main Idea

Businesses seek profit by providing goods and services in exchange for money. Companies thrive on competition, the contest between businesses to win customers. Competition and profit motivate businesses to continually strive to find new ways to satisfy customers.

Key Concepts

How to Define Business

Business Activities

Business and You

Key Terms

business

profit

any commercial activity that seeks profit by providing good and services in exchange for money

the money left over after a business has paid the cost of providing its goods and services

Key Terms

competition

marketresearch

the contest between businesses to win customers

the act of gathering and analyzing information about the wants, needs, and preferences of consumers in a certain market

Key Terms

consumer a person who uses goods or services

How to Define Business

Your wants and needs are usually satisfied by a business.

businessany commercial activity that seeks profit by providing goods and services to others in exchange for money

How to Define Business

Businesses seek to make a profit. profit

the money left over after a business has paid the cost of providing its goods and services

How to Define Business

Businesses provide consumers with necessities, such as food, clothing, housing, medical care, and transportation.

Businesses also provide goods and services that make life easier and better.

The Motive of Business: To Make a Profit

Without a profit, a company cannot survive.

The wealth created by businesses benefits the entire community because businesses pay taxes and provide jobs.

The Significance of Competition

Competition happens when businesses continually try to improve their products and services and do better than one another.

competitionthe contest between businesses to win customers

The Significance of Competition

Offer quality

products

Offer quality

products

Offer outstanding

service

Offer outstanding

service

Offer competitive

prices

Offer competitive

prices

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The success of a business depends on how well key activities are coordinated, managed, and performed.

Identifying opportunities for products and/or services

Evaluating the demand for products and/or services

Managing the production of goods and/or services

Marketing the goods and/or services

Keeping records to satisfy government requirements and improve processes

Business Activities

Some business activities should be supported by market research.

market researchthe act of gathering and analyzing information about the wants, needs, and preferences of consumers in a certain market

Target Market

A target market is a group of people identified as those most likely to become customers.

Develop a list of shoe stores in your area and the likely target market for each.

Business and You

Businesses make many decisions that impact you, the consumer.

consumera person who uses goods and services

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Businesses Affect Consumers

Businesses decide what goods and services to produce.

Businesses affect the consumer when a product is discontinued.

Business affects you as a wage earner because they provide jobs.

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Consumers Also Affect Businesses

Consumers decide what kind of goods and services they want.

Consumers decide where they will buy the goods and services they want.

The decisions of consumers can determine the success or failure of a business.

1. Define business

Business is any activity involving the exchange of money for goods and services.

2. List the activities that every business undertakes when developing new products and services.

identify opportunities, evaluate demand, obtain money, manage production, market products, keep records

3. Describe why it is important to understand how business impacts you and how you impact business.

Answer pending.

Chapter 1

Basic EconomicConcepts

Section 1.2

Business Activities

End of