1. Chapter 3 Our Free Enterprise System

2. Activity #1 – Individual If you could open a restaurant in Miami what kind would you open and why? Discuss…. – Location – Type of Food – Motive

3. Free Enterprise System Encourages Entrepreneurship Little Government Intervention Freedom to Own Property Compete in the Marketplace Risk With the hopes of making a PROFIT!

4. What is Competition? The struggle between companies for customers. It promotes better quality goods Provides a wider selection of goods Brings down prices

5. Two Types of Competition Price Competition – (Price) Non Price Competition – (quality) Monopoly – (no competition)

6. What is Risk? The potential for loss or failure 1 in 3 businesses fail within the first year of operation. 85% of new products fail in the first year. If these figures are true why do entrepreneurs start these businesses?

7. PROFIT! The money earned from conducting business after all costs and expenses have been paid. (1-5% of Sales) Sales – Costs & Expenses = Profit or Net Profit

8. What happens when companies are not profitable? Lay off employees Investors can loose money Suppliers lose money Government suffers - less taxes Unemployment goes up

9. What does the Government do for YOU? Provides Services Supports Businesses Regulates Competes

10. The Role of the Consumer You pick the products that win in the marketplace You help determine prices!

11. Supply & Demand $ Quantity SUPPLY DEMAND EQUILIBRIUM

12. $ Quantity S D Surpluses v.s. Shortages Surplus Shortage

13. Activity #2 – In the Chips