1. Understanding Business 1.1 - Business Activity
Business Management (National 5)
Understanding Business Business Activity
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2. What is a business?
BUSINESSES are organisations that are formed to provide:
GOODS
SERVICES
GOODS and SERVICES can be:
DURABLE
NON DURABLE
CAPITAL
CONSUMER
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3. The Business Cycle
The process of businesses using the factors of production to produce goods and services to satisfy the needs and wants of consumers is known as the BUSINESS CYCLE.
This process is a cycle because it goes on over and over again because consumers UNLIMITED wants constantly create new things that businesses can produce.
The cycle means that if a business is to succeed it MUST pay particular attention to minimising its externalities and satisfying consumers unlimited wants to stop the business failing.
Consumers have NEEDS and (NEW and UNLIMITED) WANTS.
Businesses identify consumers NEEDS and WANTS and decide to make GOODS and SERVICES to satisfy them.
THE
BUSINESS CYCLE
Wages from employment allow consumers to CONSUME goods and services.
Businesses employ the FACTORS OF PRODUCTION to PRODUCE the desired goods and services and increase WEALTH.
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