Elements of Microeconomics

Topics: Planned economy, Economic system, Economics Pages: 2 (576 words) Published: May 1, 2011
Considering the elements of microeconomics, create a list of three (3) best practices that would benefit any small business or start-up. Explain your rationale. The element of microeconomics is every business endeavor is an exchange between a buyer and a seller. Understanding the factors that determine demand and supply is the first best practice that would benefit a small business startup. The demand reflects the willingness and ability of buyers to purchase goods and services at different prices. The supply is the amount of goods and services needed for sale at different prices. Another suggestion for starting up a small business is to check the demographics of the area and what people want and how much they can afford. If an entrepreneur does this research he has a much better chance of survival. The third best practice is to research your competition. The supply and demand does not have to be like them but it will give you the tools to see what your company can do better than the other. A smart business person needs the knowledge and savvy of finding out how to prove to shoppers that your service or product is the better than anyone else’s. Chapter 3 discusses three (3) types of economic systems: capitalism, planned economies (socialism and communism), and mixed market economies. Create and describe a fourth type and explain why it would bet better than the other three (3). Please be as creative as you like. Capitalism is the private enterprise system and competition. This economy needs to run on its own to succeed. The government is not involved and it is about fierce competition. It is a way for individuals to use their knowledge to gain the advantage.Mixed Market is about blending all the economies together. This has worked for France hundreds of years. They blend private enterprise, government owned firms and also socialism and it has worked well for them. Planned Economics (Socialism and Communism) is a way of dictatorship and keeping everyone on the...
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