Transcript What Affects Price?

What Affects Price?
Entrepreneurship
Unit 9, Lesson 1
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Agency, 2013. All Rights Reserved
Copyright
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2
Supply and Demand
• Supply - how much of a good or service a producer
is willing to produce at different prices
• Demand - individual’s need or desire for a product
or service at a given price
• Equilibrium Price and Quantity - point at
which the supply and demand curves meet
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3
Costs of Doing Business
• Fixed Costs - Cost that must be paid regardless
of how much of a good or service is produced
• Variable Costs - Costs that go up and down
depending on the quantity of the good or service
produced
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4
Marginal Benefit and
Marginal Cost
• Marginal Benefit - Measures the advantages of
producing one additional unit of a good or service
• Marginal Cost - Measures the disadvantages of
producing one additional unit of a good or service
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5
Market Structure and Prices
• Perfect Competition - Very large number of
businesses producing nearly identical products and
has many buyers
• Monopolistic Competition - Large number of
independent businesses that produce goods and
services that are somewhat different
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Market Structure and Prices,
Cont’d
• Oligopoly - When a market is dominated by a
small number of businesses that gain the majority of
total sales revenue
• Monopoly - There is only one provider of a
product or service.
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7
Assignments #1 and #2
• Results of Business Competition in a Small Community Assignment
Many small communities only have one grocery store. Some of these small communities now also
have a convenience store associated with a service station. The convenience store carries a
limited number of grocery items for very high prices. Students must explain to the class how the
community changes dramatically when a large supermarket comes to town. The monopoly or
oligopoly business atmosphere drastically changes when a major corporation that has huge
buying power can offer a wide range of items for very reasonable prices. Ask students to research
a large supermarket company and to prepare a report about the company’s commitment to the
community and changes that take place when large super markets come to town.
• Large Supermarket Retailer Comes to Town Assignment
Ask students to make an oral presentation for a large super market retailer to the class. The
presentation must convince students that allowing the retail giant into the community is good for
consumers and the community. The presentation must also address how large super market’s
presence in the community affects local small businesses. Student’s presentations must include
an introduction, body, and conclusion.
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8
Assignment #3
• International Issues Written Persuasive Report Assignment
International business in the United States involves some controversial issues. Illegal
immigrants make up a sizable portion of the workforce for construction, food
processing, and agricultural businesses. Businesses that hire illegal immigrants save
large sums of money because they can pay lower wages and skip fringe benefits.
These employers are breaking the law when they hire illegal residents. Ask students to
research the struggles facing an open border between U.S. and Mexico and prepare a
paper that defines the major issues, supports their position on the issues, and explains
how their actions may affect the U.S. economy. This project will be evaluated using the
related rubric.