Potential profit margin of Business economics

        The profit margin is normally the percent of revenue that an organization going to earn after paying all expenses, depreciation, taxes interest and other expenses. Every organization has its own way to use its profit margin. The profit margin can be calculated with the following formula: Profit margin= (total sales-total expenses)/total sales.

Potential profit means the potential of a product to generate revenue after paying all the major expenses and consider as net income. (Cozad, 2019)

        There are many benefits of profit margin because every business can run only for the purpose of generating income but with the other reasons behind the usage of profit margin are; it provide help in expanding the business, it is helpful in financing and it helps to resolve all the issues. There are normally two types of profit margins that are calculated by different businesses that are gross profit margin and net profit margin.

        Expansion of goals, economy and industry, all these factors are depend on the good profit margin other factors that consider the profit margin in the category of good are: specific industry, longevity and size, expansion of goals, and many others. These are help to improve the profit margin of the organization to generate more revenue and overcome its expenses. the profit margin can be improve by decreasing the expenses, remove the product or services of underperforming, product or service offering going to increase, and maintain all the additional charges.  (fundera.com, n.d.)

Exogenous and endogenous of Business economics

        Endogenous variables: these variables are going to used in linear regression and econometrics. They are just like depend variables. In the system, the endogenous variables have values that are determined by other variables. The variable is said to be endogenous within the model if its value going to determine by the independent variable. So endogenous variables are completely dependent variables related to the interest. The dependent variable creates in the model whose value going to be change by the relationship of other variable in the function.

        The exogenous variables are consider as those variable which are independent and are not affected by other factors in the system. Exogenous variable like availability of seeds, pests, skill of farmers and weather that are independent variables in the production system. These independent variable effect the other variable through its functions and performance so they affect others but have no effect from others. Its meaning consider as to produce or outside. It means that they are free from any boundary or any other factor and perform their task without the interaction of any other factors. (statisticshowto.datasciencecentral.com, 2019)