Answer to Question #285743 in Economics of Enterprise for Charlton

Question

1. What are the two primary elements of a going concern?

2. What does it mean to say that a business is a purposeful activity?

3. How does a business determine whether or not its products and services are valuable? Define the relationship between price and quality, and their effects on value.

4. Explain the role of a value proposition for a business. What is the value proposition for YouTube?

5. Describe how a capitalist economy differs from a socialist economy.

Answer 1

Solution:

1.). The two primary elements of going concern are :

·        That the business will continue to operate in the foreseeable future.

·        That the business I stable and has strong financial statements.

 

2.). A business is a purposeful activity when it exists to primarily handle a particular issue or challenge in the economy in a specific way and sees the sale of goods and services as a tool for this positive change.

 

3.). A business determines whether or not its products and services are valuable by looking at the sheer profitability of a particular product to measure its value including the total revenue derived from the product.

The relationship between price and quality is that of value, which means that the higher the quality and value of a product, the higher the price and vice versa. The price of a good is a good indicator of its quality.

For a pricy product, it has to have a high quality and value compared to a cheaper product.

 

4.). The role of value proposition is to identify the benefits a company’s products and services will deliver to its customers.

The value proposition of YouTube is offering users access to billions of videos to view. It works as a stage for creators of original content to get their stuff out there to be viewed by millions of viewers.