The same is true of the decisions made concerning production with scarce resources. There is always a next best alternative good sacrificed. In other words, there is always an opportunity cost decision made when production choices are determined. More than one half of all new companies fail in their first two years. Entrepreneurs starting new companies take great risk with their financial investment as well as their time.
Profit is the income earned by the entrepreneur.
If a person chooses to remain an employee throughout his career and not take the risk of starting a business, he cannot earn the profit that is the reward for his bearing risk. This is best understood by looking at a Production Possibilities Frontier. If a country is producing at any point along its production possibilities curve X1 to X2 on such as points A or B, it is using all of its resources efficiently and completely. In other words there are no idle machines, no unemployed labor, no empty factories. Suppose that this country is currently producing at point B on curve X1 to X2.