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Sources of Economic Profit Outline

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Sources of Economic Profit
I.

Introduction

Organizations strive to design their operations to enable them achieve efficacy in their
activities. Most of the organizations have the ultimate goal of making profits to enable the firms
run smoothly and competitively in the market.
II.

Thesis Statement - Organizations enact various best practices that act as sources of
economic profits to enhance the productivity of the firms

III.

Summary
a. Market Control

Market control is one of the major sources of economic profits in the market. It defines the
extent of influence that a firm has over the market price. Market control is often achieved
through monopoly advantages’ instance, when a firm is the sole producer of a certain product, it
sets high prices and earns maximum profits.
b. Innovation
Innovation refers to the unique discoveries by the companies that boost its customer base and
profit generation. Innovation is a critical practice as it makes the entity to attract customers and
improve the company’s productivity.
c. Economies of Scale
Economies of scale refers to the activity that a firm undertakes which increases the production
and minimizes the costs. The process enables the firm to realize cost advantages and minimize
the costs. Economies of scale can be achieved when a firm increases its production levels across
the nation in its various outlets thus minimizing the costs that would have been incurred in case
the production was focused on one production company.

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d. Risk
It is essential for enterprises to study the market and decide on the appropriate innovation and
activity to enact to enhance the profitability in the organization. The current market has many
firms which pose a competitive environment in the economic realm
e. Market Size
The market is vital in profit generation because it determines the customer base for the
products. The market size affects the demand and supply of various products in the market. For
instance, a densely populated region provides ready market for a business products and services.
f. Value Addition
Value addition is the process undertaken by a business entity towards enhancing its product to
increase its sales. The company adds components that improves the quality of the products thus
enhancing its customer base.
g. Design Thinking
Design thinking encompasses of the process where a business focuses on the good of the
customers. The design is meant to solve customer problems and ensure that the customer needs
are met in the organization
IV.

Conclusion

It is prudent for organizations to enact best practices that would enable them to accrue
economic profits. Accruing economic profits enables firms to manage their operations efficiently
thus enhancing productivity in the firms.

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V.

References

Achakulwisut, P., Erickson, P., & Koplow, D. (2021). Effect of subsidies and regulatory
exemptions on 2020–2030 oil and gas production and profits in the United States.
Environmental Research Letters, 16(8), 084023.
Carayannis, E. G. (Ed.). (2020). Encyclopedia of creativity, invention, innovation and
entrepreneurship. Cham: Springer International Publishing.
Desmond, M., & Wilmers, N. (2019). Do the poor pay more for housing? Exploitation, profit,
and risk in rental markets. American Journal of Sociology, 124(4), 1090-1124.
Hossain, M. E., Khan, M. A., Saha...