Economics of Marketing
Economic Basics Economics - study of the choices and decisions that affect making, distributing, and using goods and services Unlimited needs and wants but limited resources
Gross Domestic Product Value of all good and services produced within the countryValue of all good and services produced within the country Helps business make decisions Free enterprise system –Allows business to make own decisions
Characteristics of Free Enterprise Profit Risk Competition –Price Competition Demand elasticity and available substitutes –Non-Price Competition
Property Ownership Copyrights –Intellectual property books, films, video games, music Patents –Protecting products for 20 years Trademarks –Words, names, symbols, sounds U.S. Patent and Trademark Office
Forms of Business Ownership Proprietorship—business owned and run by one person –Advantages: easiest form of business to start and end; few legal requirements; sole control over all business decisions; receives all profits; income is taxed as part of personal income –Disadvantages: responsible for all debts of the business; no shelter from creditors
Forms of Business Ownership Partnership—business owned and controlled by 2 or more people –Advantages: owners are responsible for key decisions; partners share profits; written partnership agreement –Disadvantages: owners liable for debts; each partner is responsible for decisions made by all other partners; partnership is dissolved by death or withdrawal of partners
Forms of Business Ownership Corporation—separate legal entity formed by documents filed with a state. –Advantages: owned by one or more shareholders; managed by a board of directors; offer shares of stock to acquire capital; protect the liability of stockholders to only the amount of money they have invested –Disadvantages: expensive to form; board of directors have to approve dividends; more records are required; more laws regulate operations
Other Forms of Ownership Limited liability partnership (LLP) Joint venture S-corporation Limited liability company (LLC) Nonprofit corporation Cooperative Franchise
Economic Impact How is York affected by the addition of the York Revolution?
York Revolution Hotels Restaurants New jobs - means more money for York More business for local suppliers to the stadium Other community programs available