Question

Share your thoughts and conclusions about entrepreneurs, profits, and the price system.

Answer 1

An entrepreneur is a person who creates a start up or new business venture . Entrepreneur bears most of the risks of business and does all the prime decision making and so enjoys most of the rewards . He is commonly seen as an innovator, a source of new ideas, goods, services, technique , business venture .

Now every entrepreneur works for profits . Profit is like an incentive or market signal for an entrepreneur . All the work of solving business problems , innovation , satisfying consumers wants , developing business plans implementing new ideas etc are done only for profit motive . Profit is the money that is left after the entreprenuer has paid for other factors of productions he has employed . The market forces of demand and supply determine profit levels in different industries .

Price mechanism or pricing system in economics, is the manner in which the profits of goods or services affect the supply and demand of goods and services, usually by the price elasticity of demand . It is a part of market mechanism . High profit levels invokes further supply in the industry which lowers price and thus results in more quantity demanded . So profit levels and price system are closely related .