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Money, and cost of resources - the size demanded for their "payoff" at Alternative possibilities of use. Contrary to it losses are punishment for those firms, which The activity reduce value of resources. Cost of resources, Used by these unfortunate businessmen, exceeds comprehensible for Consumers the price for the goods made by them. Losses and bankruptcy is Market way to put an end to similar squandering.Let, for example, the manufacturer of shirts spends monthly 20 thousand dollars
On rent of a premise and the necessary equipment, on attraction of work,
Purchase of a fabric, buttons and other materials necessary for manufacture and
Sales of 1.000 shirts. If the manufacturer sells 1 thousand shirts under the price
22 dollars for a piece, its activity make profit. Consumers appreciate These shirts more than the resources demanded for their manufacture. Profit The manufacturer at a rate of 2 dollars for each shirt is compensation, Received by it for increase in value of resources.
If shirts cannot be sold under the price more expensively 17 dollars, the manufacturer
Incurs on each of them losses at a rate of 3 dollars They arise because of that,
That actions of the manufacturer reduce value of resources - shirts have for Consumers smaller value, than the resources spent for them Manufacture. We live in peace varying tastes and technologies, imperfect knowledge and Uncertainty. The people, making decisions in business, cannot be
Are assured neither of the future market prices, nor in production costs. Them
Decisions are compelled to be based on assumptions. Nevertheless, obviously,
That the market economy is under construction on a principle of encouragements and penalties. Firms,
Correctly guessing both effectively making those products and services, for
Which people are ready to pay the price surpassing costs of their manufacture,
Get profit, the firms working inefficiently and wrongly Directing resources in those spheres where demand appears low, bear Punishment in the form of losses. The country appears in a prize if its resources are used in manufacture
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