Question:
This solution will look at the concept of profit and business model strategy using simple terms, and a business example with 4 different scenarios. The solution will walk the student through a sole proprietorship that develops into a corporation and starts to grow its business. Different factors will be reviewed, such as variable costs (material inputs) and fixed costs, as well as production targets, strategy, and diversification of the product's customer base. The solution intends to show the student how a business owner has to seriously consider its cost and revenue strategy to determine the daily profit and the yearly profit and verify whether the business model works for the business.