How does an entrepreneur like Michael dell view
profit? From the point of view of an economist or
from a business perspective? Explain…
• Page : 1, 2
How can competition alter the plans of
successful business leaders such as Michael Dell?
• Page : 3
What characteristic of the free enterprise system
permitted Michael Dell to start & operate his
• Page : 4
Michael Dell profit view:
Michael Dell profit view was about logical theory. Store
owner is not adding any equipment or giving value on goods
of manufacturer. An owner sells goods to consumer not in an
actual rate what owner has bought already from
Business perspective view profit:
A store owner sells goods not in an actual rate. Also owner
not adding any equipment on product of manufacturer. So
owner is selling goods for only get profit in business which is
the major perspective of business.
Example: I bought computer of 15,000/= & sells 25,000/= to
customer. So my profit is 10,000. Because I’m not adding
Economist view profit:
An economist view profit has
to include opportunity cost. A
store owner should add
opportunity cost for sell goods
view to economist.
I am earned 25,000/= by
selling computer to consumer.
I can earn 50,000/= if I can Economic
work in Dell corp. as a sell view
manager. so my opportunity profit
cost will be 25,000/=
A successful business leader Michael dell faced many Plans of
obstacles in his journey. But his dynamic plans give successful
him a tremendous carrier. Michael dell made a simple business
but powerful visions. Those are: leader can
1. personal computers could be built to order and business
sold directly to customers. around the
2. bypassing distributors and retailing dealers
reduced marketing and selling costs by eliminate
the markups of resellers and building to order
3. reducing the costs and risks associated with
carrying large volumes of both and finished goods.
3. What characteristic of the free
enterprise system permitted
Michael Dell to start & operate
Michael Dell had two permitted characteristic
of the free enterprise system to start &
operate his business.
1. Bypassing distributors and retail dealers
reduced marketing and sales costs by
eliminate the markups of resellers .
2. Building to order greatly reduced the costs
and risks associated with carrying large
volumes of both and finished goods.