The Educated Guesses And Risks Of The Entrepreneur.

With the goal being to successfully sell the product; all the costs incurred by the entrepreneur are for this purpose. This differs from ‘pure’ arbitrage in that input prices attributed to resource ownership precede output sales. In this production process the entrepreneur ‘guesses’ that the future product price – the market price or the selling price – is not fully synchronized with today’s input prices. It is an educated guess, a risk, since the product prices do not exist at the time production begins. If the assessment proves true, this is what causes profits to emerge since the astute entrepreneur will have judged the future prices correctly across the time horizon.

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