Transcript Part 1 - MindMeister

The Forces of Supply and Demand
• Supply
– The number of products businesses are
willing to sell at different prices at a specific
time
• Demand
– The number of products consumers are
willing to buy at different prices at a specific
time
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Equilibrium Price
• Equilibrium price the price at which the
number of products
that businesses are
willing to supply
equals the amount of
products that
consumers are
willing to buy at a
specific point in time
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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Supply and Demand
 Critics of supply and demand
say the system does not
distribute resources equally
 The forces prevent sellers
who have to sell at higher
prices and buyers who
cannot afford to buy goods at
the equilibrium price from
participating in the market
© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Marriott International
• Competition should improve the quality of the goods
and services available or reduce prices

Marriott International went from small root beer stand in 1927 to
its current status of 3,900 high-quality hotels in 72 countries



If you treat employees well then they will provide good service to
customers
Competing to attract younger travelers with:

Reinvented lobbies with amenities

Convenient ways to check in and out
Significantly expanding in Africa and Asia capitalizing on new
market opportunities
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The Nature of Competition (1 of 2)
• Competition is the rivalry among businesses for
consumer’s dollars
• Pure competition
– The market structure that exists when there are many
small businesses selling one standardized product
• Monopolistic competition
– Fewer businesses than in a pure competition and the
differences among the goods they sell are small
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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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The Nature of Competition (2 of 2)
• Oligopoly
– The market structure that exists when there are very
few businesses selling a product
• Monopoly
– The market structure that exists when there is only
one business providing a product in a given market
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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Economic Cycles and
Productivity (1 of 3)
• Economic expansion occurs when an economy is
growing and people are spending more money; their
purchases stimulate the production of goods and
services, which in turn stimulates employment.
– This may lead to inflation – a continuing rise in prices
• Economic contraction is a slowdown of the
economy characterized by a decline in spending
and during which businesses cut back on production
and lay off workers.
– This may lead to recession – a decline in production,
employment and income
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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Economic Cycles and
Productivity (2 of 3)
• Recessions are often characterized by
rising levels of
 Unemployment – the condition in which a
percentage of the population wants to work
but is unable to find jobs
• Deflation occurs when rising
unemployment stifles demand, forcing
prices down
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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Economic Cycles and
Productivity (3 of 3)
• Severe recession may turn into a
 Depression – a condition of the economy in
which unemployment is very high, consumer
spending is low, and business output is
sharply reduced
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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Hyperinflation
• Inflation can be harmful if individuals’ incomes
do not increase at the same pace as rising
prices, reducing their buying power

The worst case of hyperinflation: Hungary in 1946

At one point, prices were doubling every 15.6 hours
 A more recent case occurred in Zimbabwe

Suffered from hyperinflation so severe that inflation percentage
rate rose into the hundreds of million

With the elimination of the Zimbabwean dollar and certain price
controls, the inflation rate began to decrease
© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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