1. Free Enterprise System
Chapter 28

2. Our country- free enterprise system OR market economy.
What does that mean?

3. Producers and Consumers
Scarcity – producer has limited resources
Consumer has limited resources

4. Supply & Demand
Supply – the amount of goods/services that producers will provide.
Demand – how bad Consumers want to purchase a good/service at a certain price.

5. Power Struggle
Consumer Power … Consumers have the ultimate power with their votes
Producer Power … Producers can use advertising

6. Equilibrium Price
Quantity supplied = quantity demanded

7. Parts of a Free Enterprise System
Competition –occurs when more than 1 producer or supplier
Monopoly – only one seller
Price fixing – illegal
Purchasing Power
The value of money measured in the amount of goods and services it can buy
Transfer payments – govt grants paid by some citizens
Informed consumer
When consumers make wise decisions prices stay reasonable