Importance of profit

Profits are important and beneficial to society, as well as to businesses. Some of the benefits of profit to our society include the following items:

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“Consumer needs and wants are met”. This idea probably sounds pretty strange – consumers benefit when businesses make profits. How is this possible? Profits enable businesses to expand. In this way, they are able to offer consumers more and different kinds of products and services. New products can be discovered, developed, or offered to satisfy customer needs and wants. In addition, the profit motive encourages businesses to change the kinds of goods or services they provide, so that changing customer needs and wants can be met. Profits encourage business owners to make their businesses more efficient, thereby conserving resources that may be needed by the consumers of tomorrow. The added benefit is that fewer resources will be used today, leaving more resources available for future consumers. Businesses compete for profits. Because of this competition, improved products and services, higher quality products and services, lower prices, and more services are offered to consumers.

“Wages and employment opportunities are better”. Businesses that are profitable can afford to pay better wages and provide more benefits to their employees. Also, profitable businesses usually hire more employees, thereby increasing employment opportunities for more workers. As businesses expand, they provide more opportunities for workers to advance.

“Our economy is strengthened”. Profitable businesses can expand, hire more workers, and invest in new businesses. All of these help to make our economy stronger and healthier because they result in more tax rubles paid to the government. The government will use the tax rubles to pay for services and programs such as education and defense, which benefit all citizens. When businesses make profits, they are more likely to contribute to charitable causes. These contributions can help to fight against the poverty and diseases, which exist in our society. Other contributions can be used to improve the community.

Of course, profits are very important for businesses. They make it possible for businesses to grow, expand, and hire more employees. Because of profits, businesses are able to develop new and improved products for their customers and to compete with other businesses. Most of all, profits provide the incentive necessary for an individual to risk the time, money, and effort invested in a business. Although businesses may be able to survive without making profit in the short run, it is absolutely necessary for businesses to make profit in the long run. Otherwise, their employees, suppliers, owners, and creditors cannot be paid. Profits, therefore, are the lifeblood of businesses, since without profits, businesses would eventually cease operating

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