lectur5-page23

lectur5-page23 - This residual amount, if any, is referred...

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23 23 Owners of resources receive payments u LAND receives RENT u CAPITAL receives INTEREST u LABOR receives WAGES u MANAGEMENT receives PROFIT The payment labor receives for use in the production process is rather obvious. Labor receives wages, salaries, and commissions. Entrepreneurship or management receives any residual amount left over after paying for the other factors of production.
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Unformatted text preview: This residual amount, if any, is referred to as profit. Successful managers are rewarded with profits, unsuccessful managers end up with losses. If losses are too great, a manager will relinquish the resources that he has control of to be reallocated to managers that will use the resources efficiently and earn profits....
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