Consider the things that you want and compare them to the things that you need

Consider the things that you want and compare them to

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Consider the things that you want and compare them to the things that you need. Would you agree or disagree that most of the things you want you don’t need? Show your Wants List to a parent or friend (especially if you have a birthday coming up). Ask if his or her wants are the same as yours. You will find, no doubt, that they are very different. Wants are the way you satisfy your needs. You need to eat, so you want a pizza or a veggie burger or a low-fat yogourt. Wants reflect your personality, and what you want tells people what you think is good, or important, or desirable. What did the person you asked say he or she wanted that was different from what you wanted? Why don’t you want the same things? Where Do the Things You Want Come From? Items you want are available in stores, in catalogues, or online. The businesses that make these items spend a lot of money on marketing research, trying to figure out if you’ll want the item before they make it. They also spend a great deal of money on advertising to convince you that you really do want the item. You spend most of your money in businesses that give you what you ask for. In exchange for money, businesses satisfy your wants. So far, you know that you have needs and wants and that these differ. Needs are those things that you could not live without, and wants are the things that make you happy to own them. Although some needs are free, most needs and all of your wants are supplied by businesses. Why Do Businesses Exist? Businesses exist to satisfy the needs and wants of their customers and to make a profit. If the business satisfies your needs, you will continue to buy the goods or services the business makes or sells. When the business stops satisfying you, you stop buying. Think of products you had to have when you were younger: the latest action figure, the newest doll, the most recent Robert Munsch book.
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Lesson 1, page 6 Introduction to Business BBI2O-B Copyright © 2008 The Ontario Educational Communications Authority. All rights reserved. You probably no longer want many of the things you loved when you were a child. Perhaps you now want new products, such as an MP3 player or a 42-inch flat-screen television or a hybrid car. These new products satisfy your wants and needs better than the old products did (CDs and tapes, 19-inch colour televisions, and gas-guzzling SUVs). Businesses must keep up-to-date with new technology and new inventions, and even new consumer trends, or consumers will no longer want their goods. Profit is created when a business sells its products or services for more than it costs to make or provide them. A possible profit scenario using the Jones Soda Company as an example is in Figure 1.1. It costs the company 20 cents for the goods to make each drink, including the bottle, bottle cap, sugar, purified water, bubble gum flavour, and blue food colouring (cost of goods). It also costs the company $400 a day to cover its overhead (the daily costs of doing business) such as rent, utilities (heat, hydro, and water), labour, phone, and other business expenses. If the
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