The entrepreneur discovers a profit opportunity when the prices of products somewhere in the production process are not properly adjusted to the prices of the resource services in the factor markets. A keen eye for assessing the marginal value product of each factor, relative to the final price of the good consumed, helps the entrepreneur determine whether its ‘productive share’ is undervalued (or overvalued).
Lower prices, higher quality, and more products to choose from are what people want so entrepreneurs are also striving for these and deserve the credit for bringing them about. Along the way the profit seeking entrepreneur brings about new cooperative arrangements between previously disconnected parties. For example, resource owners may be made aware of a profit opportunity and then decide to take on the role of a capitalist. Another example, as a result of entrepreneurial discovery producers may begin working with new resource owners or they may begin producing for a different group of consumers.
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