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Why would a business choose to sell goods or services at cost rather than at a profit?
Wiki User
∙ 14y ago
The business may be at an introductory stage in its life, where it is breaking into the market and trying to get noticed by the consumer. A way of getting noticed is to have very low retail prices compared to the competitors, which will attract consumers to your business, where you can then increase prices once the business has a reputation in the market.
Wiki User
∙ 14y ago
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Is discretionary spending the same as spending on goods and services?
No, 'discretionary' spending is that which you choose to make rather than have to make.
Should opportunity cost be deducted from gross profit?
No Opportunity by definition is the cost of the next best alternative not taken by the business. To give an example, if a firm makes £100,000 net profit , the opportunity cost could be for example, the interest not gained because the money has been invested in to the business rather than put in the bank. Profits are worked out as follows: Revenue - Cost of Sales (this is how much the raw materials cost to produce the output) = Gross Profit Then deduct all expenses such as Overheads (i.e. water bill, rent, rates etc) and deduct any depreciation charges or other expenses You are then left with Net Profit (before tax) You then deduct tax payable on the profit then deduct any money you are goin to pay to shareholders Then you are left with Net Profit after Tax (also called Retained Profit) Hope that makes sense
What is sales maximization model?
Term sales maximization Definition: The notion that business firms (especially those operating in the real world) are primarily motivated by the desire to achieve the greatest possible level of sales, rather than profit maximization. On a day-to-day basis, most real world firms probably do try to maximize sales rather than profit. For firms operating in relatively competitive markets, facing relative fixed prices, and relatively constant average cost, then increasing sales is bound to increase profits, too. Moreover, according to the notion of natural selection, even firms that seek to maximize sales, those that also maximize profit will remain in business.
Under which economic system are resources devoted to production for use or need rather than production for profit?
socialism
Which does not describe a market economy?
The problems of scarcity and allocation of resorce are addressed by production for use or need rather than production for profit A+
What do you call a business whose goal is to provide a service rather than to make a profit?
Any business that has a goal of not making a profit is a Non-profit business. The service it provides can be debt counseling for example for indigent people. Or, for another example, a non-profit service business can be one that helps people with their tax returns.
What is commercial establishement in hospitality?
A for-profit business, such as a hotel or restaurant; rather then say, a middle school cafeteria.
Are boating charter services rather interesting for big companies?
Boat charter services are available to anyone who can afford them. In fact most of them would rather charter to an individual rather than rely on companies for business.
What is the name of business that provides services to people rather than producing goods?
service industries
Is discretionary spending the same as spending on goods and services?
No, 'discretionary' spending is that which you choose to make rather than have to make.
What is a business that provides services to people rather than produced goods?
The Red Cross provides health and protection.
Why work for the company?
A person might work for a company rather than go into business for themselves because of the cost. There are many business expenses that need to be paid before a company can make a profit.
Why might a business choose to use IT outsourcing services?
Outsourcing is beneficial to the company more so than the employees. It's sales based, rather than an hourly pay. So with outsourcing, the company only pays you what you sell, and not an hourly wage.
Why are public transits and water systems exempt from antitrust laws?
Because they are a Public Utility providing a vital service and operating "For the Public Good" rather than simply a profit-making venuture. They usually are not profit-making operations and their income and fees must be protected from predatory pricing and competing ventures to ensure that they are able to remain in business and continue to supply vital services.
What is Profit-making companies?
A profit making organisation is an organisation which its priority is to make a profit rather than to help the community.
Why Marketing of services?
One needs marketing not only for products, but for services as well. Many companies offer a services, rather than a product. If you don't market what you offer, how will people know this service exists? Market your services everywhere you can so that your business can strive.
Is retained profit the same as net profit?
No, retained profit and net profit are not the same. Net profit is the total revenue earned by a company after deducting all expenses, including taxes, overheads, and costs of goods sold. Retained profit, on the other hand, is a portion of net profit that is kept by the company for reinvestment in the business, rather than being distributed to shareholders as dividends.
