Answer to Question #220557 in Economics for mpho

Question

elaborate on any five factors which influence profit

Answer 1

The change in profit is influenced by two groups of factors: external and internal. External factors include natural conditions; transport conditions; socio-economic conditions; the level of development of foreign economic relations; prices for production resources, etc.

Internal factors of profit change can be the main factors (sales volume, production cost, product and cost structure, product price); minor factors associated with violation of economic discipline (incorrect pricing, violation of working conditions and product quality, leading to fines and economic sanctions, etc.).

When choosing ways to increase profits, they are guided mainly by internal factors that affect the amount of profit. The increase in the profit of the enterprise can be achieved by increasing the output; improving product quality; sale or lease of surplus equipment and other property; reducing the cost of production due to more rational use of material resources, production capacity and space, labor and working time; diversification of production; expanding the sales market, etc.