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Canada (158,181)
MGTA01H3 (583)
Chapter 1

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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

MGTA03Summer2011 Chapter 1 Understanding the Canadian Business System The Concept of Business and Profit o Business an organization that seeks to earn profits by providing goods and services to people o Profit the money that remains after a business expenses are subtracted from its revenuesfundamental reason for a business to exist o Expenses the money a business spends producing its goods and services and generally running the business aka costs o Revenues the money a business earns selling its products and services aka sales o Not all organisations are businesses example hospitals universities churchesthey do not provide services and are thus not intended for profit o A loss occurs when a business costs more to produce the products and run than the business can generate through sales example GMloss of 31 billion dollars o In Canadabusinesses exist to earn profits for owners who are free to set them up o But consumers also have freedom of choice therefore business must take into account what consumers want or need in order to be successfulo Business create most innovations and opportunities for other businesses which serve as their supplierso Many businesses support charities and provide community leadership Economic Systems Around the World o Economic system the way in which a nation allocates its resources among its citizen
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