- would professionals and employees really work their absolute hardest and devote so much time and energy into something that they were doing for free? --> $$ incentivizes them, only makes them more productive
Entrepreneurs: Figure out what people value and make those products
Three Factors of production:
1. Land - explicit cost is the rent and implicit cost is the opportunity cost of paying that rent
2. Labor - explicit cost is the wage and implicit cost is the opp. cost of that wage
3. Capital - explicit cost is rent and implicit cost is opp. cost of rent
Entrepreneurial Equation
Profitability Rate = Rental rate + Appreciation rate - Interest rate
Rental rate = (annual rent)/price
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