Capitalism as well as all economic systems use money. Money can be anything, we usually use paper. It is whatever society accepts as a medium of exchange. There are five basic questions that all economic systems must answer including our market system . Firms will produce those goods where they can earn profits, they will not produce goods if they lose money.
Firms receive revenues upon selling the goods they produce.
To produce goods firms incur costs. TR - TC Remember we are discussing this concept of profit because the profit that a firm makes acts as a method of determining what will be produced. Thus we need to examine this profit concept in more detail. TR is straight forward, it is price multiplied by the amount the firm sells. TC however, is a bit more complicated.