Basic survival needs for individuals are food, clothing, and shelter. A want is something that adds comfort or pleasure to their lives. Strategies to attract consumer interest are to create something new and/or improve, promote the latest trends, or compete with similar businesses.
Demand, Supply, and Price
Demand is the quantity of a good or service that consumers are willing and able to buy at a particular price. Some conditions that create demand are consumer awareness, price, supply, and accessibility.
Law of Demand and its relationship to prices and consumer is defined as the following: * When prices decrease, consumers buy more and the demand goes up. * When prices increase, consumers buy less, demand goes down. * There is an inverse relationship between the two.
An increase (decrease) in Quantity Demand refers to a movement down (up) the demand curve in response to a fall (rise) in price.
Factors that affect demand are consumer income, changes in taste, customer expectations, and population.
Supply is the quantity of a good or service that businesses are willing and able to provide within a range of prices that people would be willing to pay. Some conditions that affect supply are the cost of producing or providing a good or service, and the price consumers are willing to pay for it.
Law of supply refers to increasing the quantity supplied as prices increase. An increase (decrease) in Quantity Supplies refers to a movement up (down) the supply curve in response to a rise (fall) in price. There is a direct relationship between the two.
Factors that affect supply are the number of producers, changes in price, changes in technology, and changes in supply.
Price is determined by supply and demand as well as the cost of producing or providing the good or service.
Things to know:
* Make sure to label the graphs completely with the capital D or S at the end of the line. * Market Equlibrium: Occurs when both producers and consumer are willing to sell and buy a service at a specific price (when the two lines intersect) * Demand Schedule: A chart that shows the quantity demanded and the price provided. * Supply schedule: A chart that demonstrates of Quantity supply correlates to price. * Revenue – Expenses = Profit (or loss) ~ Basic equation. * A business is considered solvent when debts are paid and financial obligations are met. * A non-profit organization operates strictly to help a community like a charity while a not-for-profit organization uses any surplus funds to improve service to its members. * Decision making process: Determine the decision, identify the alternatives, evaluate the pros and cons of each alternative, make a decision and take action, evaluate the decision. * Command Economy: Decisions on what, how, and to whom resources will be made/sold determined by the government. * Market Economy: Decisions on what, how, and to whom resources will be made/sold determined by business people. * Interdependent: Society and business rely on the goods and services provided by the thousands of different businesses to satisfy consumer needs and wants. * Monopoly – A single seller that controls the supply of a particular product within a market. * Oligopoly – A few sellers that control the supply of a particular product within a market. * Perfect Competition – Many sellers compete in supplying a particular product within a market. * Disequilibrium – A price where the buyers intentions are not consistent with those of the seller. * Substitute in Consumption – A product that can be used as a substitute for another product. Complement in Consumption – A product used in conjunction with another product. * Business cycle – Goes from Trough (lowest level, many people unemployed, business not making profit), to Recovery (demand for goods and services...