Profit Motive
Profit
 - the extent to which a person or
business is better off at the end of a
period
 - also can be defined as money made
minus expenses. (Revenue – Costs)
Motive
 - reason for doing something.
 - also called incentive.
Profit Motive
 Money is the incentive.
 We want to make more money than we
spend.
Example 1
An individual is working for $9 an hour.
They are offered a job that pays $12 an
hour. Do they take the new job?
Why or why not?
Example 2
ACME Bread, Inc. can open up a new
store in either Greenville or LaGrange. A
new store in Greenville will make
$37,000 a year, while a new store in
LaGrange will make $89,000 a year.
Which town should ACME choose to
open a new store?
Why is there no McDonalds in Franklin?
Example 3
Jones Sheet Metal is thinking about
adding two new employees at $11 an
hour. What would Jones Sheet Metal
need to know before they should make a
decision?
The Consumer
Q - How do consumers benefit from
entrepreneurs focusing on making
profits?
A - Entrepreneurs will produce products
that consumers want and sell at prices
that consumers will pay. Also, producers
will work to improve products to attract
more consumers.
Questions?