How do businesses make money?

Answer 1

They develop or resell a product that they produce or purchase for a lower cost then they sell it for. The cost of producing a product depends on the labor and material required to make one. Quantity discounts typically apply when ordering base material which results in cost savings to manufacture. The selling of the good depends on what value is attributed to it by the open market. The higher your material cost the more you must charge to break even or make a profit. The more you pay an employee, or what benefits you must provide by law, the higher the end cost to break even or make a profit. Additional taxes imposed by Local/State/Federal government must be tagged on to the price to the consumer to maintain a break even or profit ratio that enables you to survive as a business during economic fluctuations. With lower taxes you can lower the price of the product to make it more marketable or pay higher wages to your employees to build loyalty to your company.