A firm will make a profit when?

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money, euro, profit @ Pixabay

A firm’s goal is to make money. This can be achieved by earning a profit or reducing losses, but it doesn’t always work out that way.

For example, if the price of an item goes up and people stop buying it from you, then your profits will decrease because you are selling fewer items at higher prices.

SURPLUS

On the other side of this economic pattern is when your company has a surplus in supply; this means that there were more goods than what was sold for the time period and so they have to lower their prices for future sales.

triangle, quality, time @ Pixabay

These are just some examples of how companies need to keep track of their costs and revenues in order to know whether they are making money or not! -Profit is created when revenue exceeds costs.

A company’s goal is to make money and this can be achieved by earning a profit or reducing losses, but it doesn’t always work out that way. These are just some examples of how companies need to keep track of their costs and revenues.

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