The three components of business is; business as a commerce, business as an occupation, and business as an organization. The business in my area I would like to talk about is the little store right down the road here. It is owned by a very nice man from India. His products fit the area. He buys and trades for goods that the people around High Island might buy. There are so many different races and ages that stop there because it is a mile from the local beaches and they are headed to the beach for fun, fishing, or both. So the shelves are stocked with things that these people might buy but the prices may be a little high because the store is the only one for many miles. Business as an occupation with this store is that the owner Dave buys things from a local warehouse that deals in large wallets and belt buckles. There are other small items Dave buys from the same person. So he is trying the product out and if it sells he will buy more, it they do not sell he will not be buying anymore because they will not sell so no profit or not very much of one. So the man makes the stuff then sells it to Dave who sells to his customers.
Prices do go up in Dave’s store when the price of his products he buys from the warehouse, go up. In order to keep his profit margin to stay the same he goes up in his price to his customers. These are called transaction costs and they are a part of the business