Business Activity

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

- Warranty

- Brand image