What Do Profit and Loss Tell Us?
Economic of Entrepreneurship Series Module 5
Module 5: What do Profit and Loss Tell Us?
Entrepreneurs attempt to direct resources to where they are most valued in society. This means producing goods and services that people want and need at a cost that people are willing to pay. Profit and loss both provide incentives for entrepreneurs to create value and communicate knowledge about the success (or failure) of their attempt to create value. In a market economy the function of profit and loss is to direct the allocation of resources to the most preferred uses of the people in society. This series of lessons explains the role of prices in providing both knowledge and incentives to entrepreneurs.
FEE Courses
Overview
Additional Resources
Concepts and Terms
Objectives
Introduction
What Do Prices "Know" That You Don't? by Learn Liberty
Watch Video
Think and Reflect
The Price System Part 1: Information by Dan Smith
Watch Video
Think and Reflect
Command Economy vs. Free Economy
Economics In One Lesson: How the Price System Works by Henry Hazlitt
Read Article: Ch. 15 Only
Lesson Quiz
Knowledge Recap
Bonus Material
Introduction
Read Article
Supply and Demand: Everything Has Its Price by Learn Liberty
Watch Video
Think and Reflect
A Market for Crude Oil
Lesson Quiz
Knowledge Recap
Bonus Material
Introduction
The Price System Part 2: Profits & Losses by Dan Smith
Watch Video
Think and Reflect
Economics in One Lesson: The Function of Profits by Henry Hazlitt
Read Article: Ch. 21 Only
Think and Reflect
Letter to a Grandson by Mr. Kent
Read Article
Think and Reflect
Lesson Quiz
Knowledge Recap
Bonus Material
Introduction
The Economics of Errant Entrepreneurs by Israel Kirzner
Read Article
Think and Reflect
The Importance of Failure by Steven Horwitz
Read Article
Think and Reflect
Milton Friedman - GM Auto Bailout
Watch Video
Think and Reflect
Lesson Quiz
Knowledge Recap
Bonus Material
Introduction
He Gains Most Who Serves Best by Paul Poirot
Read Article
Think and Reflect
People Before Profits by Walter Williams
Read Article
Think and Reflect
Coffee Shop Game
Think and Reflect
Lesson Quiz
Knowledge Recap
Bonus Material
Module 5 Badge