Objectives of Business (Grade 11 NSC Matric Economics): Flashcards
📚Flashcards
Practise the cards
10 cards from this deck
ShowHide
Practise the cards
10 cards from this deck
Primary objective of most businesses
Primary objective of most businesses
Profit maximisation
Profit (simplest definition)
Profit (simplest definition)
Difference between production costs & selling price
Opportunity cost definition
Opportunity cost definition
Value of next best option given up when making a choice
Type of profit using only explicit costs
Type of profit using only explicit costs
Accounting profit
Examples of explicit costs (5)
Examples of explicit costs (5)
Wages, rent, materials, utilities, equipment
Implicit costs definition
Implicit costs definition
Intangible expenses like entrepreneur's time, effort, skills
Economic profit formula
Economic profit formula
Revenue - (Explicit costs + Opportunity costs)
Minimum profit for business survival in market
Minimum profit for business survival in market
Normal profit
Can business have +ve accounting but -ve economic profit?
Can business have +ve accounting but -ve economic profit?
Yes, resources could be better used elsewhere
What economic profit reveals
What economic profit reveals
If business truly creates value or wastes resources