Economy and Marketing

Who Makes the Decisions? Controlled Economy: the government owns and controls important resources Regulated Economy: decisions are shared between the government and other groups or individuals Free Economy: resources are owned by the individuals and decision making rests solely on the individuals, no regulation Mixed Economy: some goods and services provided by the government and some by individuals

America’s Economy Private Enterprise: based upon independent decisions by businesses and consumers with only a limited government role Resources owned by individual producers Profit is the motive for business Consumers decide what will be purchased Consumers use value in deciding what to consume (Value: decisions to use resources toward the greatest satisfaction of wants and needs)

Consumers and Producers Consumers: individuals who purchase products and services Producers: businesses that use the resources they control to develop products and services Demand: relationship between the quantity of a product consumers are willing and able to purchase for the price Supply: relationship between the quantity of a product that producers are willing and able to produce and the price

Micro and Macro Macroeconomics: economic behavior for an entire society Microeconomics: relationships between individual consumers and producers

Factors Affecting Demand Strength of want or need Availability of supply Availability of alternative products that consumers believe will satisfy their need/want

The Demand Curve Demand Curve: relationship between the price and the quantity demanded The Law of Demand: as the price of a product is increased, the demand will decrease and vice versa Economic Market: all the consumers who are willing to purchase a particular product or service

The Demand Curve

Factors Affecting Supply Possibility of profit Amount of competition Capability of developing and marketing the products and services

The Supply Curve Supply Curve: a graph that shows the relationship between price and quantity Law of Supply: with the price of a product is increased, the more will be produced and vice versa

The Supply Curve

Market Price Market Price: the point where supply and demand for a product is equal