Final answer:
A business aims to earn a profit by selling goods and services. This statement is true, and profitability is essential for a business's sustainability and contribution to the economy. Profit also drives competition, leading to benefits for consumers and employee income.
Step-by-step explanation:
The statement that a business is an organization that strives for a profit by providing goods and services desired by its customers is indeed true. The core aim of businesses is to create economic value by offering products and services that meet the needs and desires of the market. The formula Profit= Total Revenue - Total Cost encapsulates the goal of every business, regardless of its size or complexity, which is to earn a profit. Profitability is what sustains a business over time and allows it to grow, provide employment, and contribute to the economy. When a firm can no longer make a profit, which is the difference between the cost to produce a good and the price received for selling the good, it may cease to exist. This exit from the industry usually occurs because the business is not meeting its objective of making a profit, and it cannot sustain its operations financially.
Furthermore, the existence of businesses has societal benefits. Consumers get better or less expensive products as businesses compete to increase their profits. This competition often leads to innovation and efficiency. The businesses with better or cheaper products tend to achieve higher profits, which then can lead to increased wages for their employees. Overall, the gains achieved from operating profitable businesses typically outweigh the losses on a national scale, contributing to economic prosperity.