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(2) Buying and Selling
Most people buy things which they want to keep (books, furniture, cars, houses) or which they want to consume (e.g. food). Traders buy things in order to sell them. They buy at a low price and they sell at a high price. The difference between the buying price and the selling price is their (gross) profit. Traders can buy more cheaply than the ordinary person because they know where to buy and they buy in larger quantities. They may have expenses which they have to deduct from their gross profit. Sometimes they have to sell at a lower price than the price at which they bought (eg bananas or peaches going bad, computer equipment which has become outdated, etc). There is a risk and a speculation in buying and selling. Part of the profit has to be put aside to cover a risk. (Example: The Big Issue. Supermarket.)
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(28 Jan 2008)
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