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Chapter 1
Basic Economic
Concepts
Section 1.2
Business Activities
Read to Learn
Explain how profit and competition motivate
businesses.
List the activities businesses undertake when
developing products and services.
Explain how business impacts you and how you
impact business.
The Main Idea
Businesses seek profit by providing goods and
services in exchange for money. Companies thrive
on competition, the contest between businesses to
win customers. Competition and profit motivate
businesses to continually strive to find new ways to
satisfy customers.
Key Concepts
How to Define Business
Business Activities
Business and You
Key Terms
business
any commercial activity that seeks
profit by providing good and services
in exchange for money
profit
the money left over after a business
has paid the cost of providing its
goods and services
Key Terms
competition
the contest between businesses to
win customers
market
research
the act of gathering and analyzing
information about the wants, needs,
and preferences of consumers in a
certain market
Key Terms
consumer
a person who uses goods or services
How to Define Business
Your wants and
needs are usually
satisfied by a
business.
business
any commercial activity
that seeks profit by
providing goods and
services to others in
exchange for money
How to Define Business
Businesses seek to
make a profit.
profit
the money left over after a
business has paid the cost
of providing its goods and
services
How to Define Business
Businesses provide consumers with
necessities, such as food, clothing, housing,
medical care, and transportation.
Businesses also provide goods and services
that make life easier and better.
The Motive of Business: To Make a Profit
Without a profit, a company cannot survive.
The wealth created by businesses benefits
the entire community because businesses
pay taxes and provide jobs.
The Significance of Competition
Competition happens
when businesses
continually try to
improve their products
and services and
do better than one
another.
competition
the contest between
businesses to win
customers
The Significance of Competition
Offer
quality
products
Offer
outstanding
service
Offer
competitive
prices
Graphic Organizer
The success of a
business depends
on how well key
activities are
coordinated,
managed, and
performed.
Identifying opportunities for products
and/or services
Evaluating the demand for products and/or
services
Managing the production of goods and/or
services
Marketing the goods and/or services
Keeping records to satisfy government
requirements and improve processes
Business Activities
Some business
activities should be
supported by market
research.
market research
the act of gathering and
analyzing information
about the wants, needs,
and preferences of
consumers in a certain
market
Target Market
A target market is a group of people identified
as those most likely to become customers.
Develop a list of shoe stores in your area and
the likely target market for each.
Business and You
Businesses make
many decisions that
impact you, the
consumer.
consumer
a person who uses goods
and services
Graphic Organizer
Businesses Affect Consumers
Businesses decide what goods and services
to produce.
Businesses affect the consumer when a product
is discontinued.
Business affects you as a wage earner because
they provide jobs.
Graphic Organizer
Consumers Also Affect Businesses
Consumers decide what kind of goods and
services they want.
Consumers decide where they will buy the
goods and services they want.
The decisions of consumers can determine the
success or failure of a business.
1. Define business
Business is any activity involving the exchange
of money for goods and services.
2. List the activities that every business
undertakes when developing new products
and services.
identify opportunities, evaluate demand, obtain
money, manage production, market products,
keep records
3. Describe why it is important to understand
how business impacts you and how you
impact business.
Answer pending.
End of
Chapter 1
Basic Economic
Concepts
Section 1.2
Business Activities