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What is the main motive of economic profit?
The profit motive is a key tenet of rational choice theory, or the theory that economic agents tend to pursue what is in their own best interests. In accordance with this doctrine, businesses seek to benefit themselves and/or their shareholders by maximizing profits.
What is profit motive quizlet?
Profit Motive. the force that encourages people and organizations to improve their material well-being. Open Oppurtunity.
What is the purpose of the profit motive?
The profit motive is the intent to achieve a monetary gain in a project, transaction, or material endeavor. Profit motive can also be construed as the underlying reason why a taxpayer or company participates in business activities of any kind.
Why is profit motive important to capitalism?
Profit Motive That is the driving force behind capitalism and the free market economy. The profit motive drives businesses to come up with creative new products and services. They then sell them to the most people. Most economists agree that the profit motive is the most efficient way to allocate economic resources.
What is best definition of profit?
Profit describes the financial benefit realized when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question. Profit is calculated as total revenue less total expenses.
What does the profit motive make businesses to do?
What Best Explains What the Profit Motive Pushes Producers to Do? Raise Customer Satisfaction. Repeat business from satisfied customers leads to higher profitability, because it requires little or no additional marketing cost to convince existing customers to buy from the company. Efficient Resource Use. Innovation. Poor Ethical Choices.
Why is it important to have profit motive?
The profit motive is a good of value to the economy. It is needed to provide incentive to generate efficiency and innovation . However, over-remuneration of the profit motive creates profit inefficiency. The majority of criticisms against the profit motive center on the idea that profits should not supersede the needs of people.
What roles do profit motive and competit?
The roles of profit motive and competition play in the free enterprise system. Making a profit is primary incentive of free enterprise . Profit is the money that is kept after all the expenses of a running business have been deducted from the income. Competiton among business is good for consumers because it provides choices and forces
What is profit potential?
profit potential. The capacity for making more money in future transactions in business and trading. Profit potential is an important factor in any business or investment plan, and it is often a key element in the assessment of high percentage trades in the various asset markets. You Also Might Like…
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