Profit, Losses, and Entrepreneurs
We know very little about private entrepreneurs even though many of them have done a lot to improve our lives. Society as a whole also doesn't usually celebrate the making of profits. We celebrate giving them away. For example, Bill Gates is more highly regarded for his donations and charities than he is for being so wealthy. Money will always be the motivator. Even if you love what you do for a living, pay is still important. For instance, the polio vaccine probably wouldn't exist if it were created based on the developers' altruism. The scientists behind the cure created it because they knew it would make them money. Taking money out of the equation ensures that the good won't be there.
The costs of factors of production--land, labor, and capital--matter for entrepreneurs. Explicit and implicit costs are important. Even if you're using your own resources to develop your idea, you're still paying for things by way of opportunity costs.
Profitability = Rental Rate + Appreciation Rate - Interest Cost
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