The money a business must spend to make and sell things is called a cost. These costs occur constantly as the business runs. Understanding costs helps business owners determine how much money they need and how much to charge for their goods. Fixed Costs Fixed costs stay the same no matter how much a business…
A customer is someone who buys goods or services from a business. Customers pay money to get what they want or need. They are the reason businesses exist and keep running. Without customers, no company can stay open. Types of Customers Businesses have different kinds of customers. Some are people who buy things for themselves…
A product is anything a business sells to its customers. It can be physical items you can touch, like phones or books. It can also be services that people use, like haircuts or car repairs. Digital items like computer software or streaming services are products, too. Types of Products Physical products are items customers can…
When a company makes products, it needs to know the cost of each item. With absorption costing, companies add up four main costs. First, they count the materials they use directly in the product. Second, they include the wages paid to workers who make the product. Third, they add variable overhead costs that change with…
In an absolute auction, the bidding process starts when the auctioneer opens the floor for bids. Interested buyers then place their bids openly. Each new bid must be higher than the previous one. When no one wants to bid any higher, the auctioneer ends the auction. The item then goes to the person who made…
An absolute advantage means someone can produce more of something using the same amount of resources as someone else. Think of it as being more efficient at making something. Let’s break it down. When a country (or person or company) can produce something using fewer resources than others, it has an absolute advantage. The resources…
Remote work is where you do your job from home or another place instead of going into an office. When you work remotely, you use a computer and the internet to connect with your coworkers, attend meetings, and complete your work. How remote work is becoming more common In the past, most people worked in…
A 24-hour society is one where people can work, shop, and do activities at any time of day or night. This idea became popular in the 1990s when more businesses stayed open around the clock to meet changing lifestyles and economic demands. How did it start? The shift toward a 24-hour society began with the…
A business is an organization or enterprising entity engaged in commercial, industrial, or professional activities. Businesses can range in size from sole proprietorships to large multinational corporations. The main goal of a business is to provide goods or services to customers in exchange for money. types of businesses Businesses operate in various industries, such as…
The 80/20 rule is simple: in many situations, about 80% of effects come from 20% of causes. This means a small number of things (the vital 20%) are responsible for a large part of what happens (80% of results). The rule is named after Vilfredo Pareto, an Italian economist in the early 1900s. He noticed…
