Introduction to Business Economics

Market structures – There are several market structures in which firms can operate. The type of structure influences the firm’s behaviour, whether it is efficient, and the level of profits it can generate. Neo-classical theory of the firm distinguishes a number of market structures, each with its own characteristics and assumptions. More…

 

Business motives – not all people directly or indirectly involved in an enterprise have the same goals or gain the same rewards. For example, entrepreneurs take business risks and expect a profit from their entrepreneurial skill and effort whereas managers, who are appointed by owners to make decisions, are not primarily rewarded with profits. More…

Profit – profit has a number of meanings in economics. At its most basic level, profit is the reward gained by risk taking entrepreneurs when the revenue earned from selling a given amount of output exceeds the total costs of producing that output. This simple statement is often expressed as the profit identity, which states that: More…