What Businesses Do.

Simple notes on what businesses do.

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Businesses Add Value to Raw Materials.

  • Businesses - pay for raw materials > transform into finish products > sell them.
  • Customers pay MORE for finished product than business originally paid.
  • Difference between cost of raw materials bought and the price customer pays = VALUE ADDED.
  • Value Added leaves a SURPLUS - used to pay other costs such as wages, rent, electricity. Left over money = PROFIT.
  • The greater the value added, the higher the profits are.

Pay Transform Sell

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