A Need - a good or servuce essential for living.
A Want - a good or service non-esssential for living.
The Economic Problem - Limited resources in a world of infinite wants.
Opportunity Cost - The best alternative to the good or service chosen.
Specialisation - Occurs when people and businesses concentrate on what they are best at.
Division of Labour - When the production process is split in to tasks and each worker performs one. This is a form of specialisation.
Why add value?
- Pay Costs, labour/advertising/materials.
- Make Profit, if costs are less than sales revenue = profit
How to add value
- Increase selling price
- Reduce cost of materials
- Customer service
- After sales care
- Brand image