How Costs and Prices Affect Profits

Front

What is the cost of production?

Back

The cost of production is what it takes to make a product, including materials, labor, and other expenses.

Front

What is the selling price?

Back

The selling price is how much people are willing to pay for a product.

Front

What is profit?

Back

Profit is the money left after paying for production costs.

Front

How does high production cost affect selling price?

Back

If making a product is expensive, the selling price might need to be high to make a profit.

Front

How can businesses earn more profit with low production costs?

Back

If production costs are low, businesses can earn more profit even if the selling price is not very high.

Front

Why is understanding costs and prices important for businesses?

Back

Understanding costs and prices helps businesses decide how to price their products.