Transcript Document

Conducting Business in a Competitive
Marketplace and in the Changing Workplace
Market Conditions and Business Environments
•Analyze the forces of supply and demand and
Explain how they affect market prices and the
Willingness of businesses to produce products.
DEMAND, SUPPLY, AND PRICE
Demand, Supply, and Price all affect one another.
DEMAND
Is the quantity of a good or service that
consumers are willing and able to by
at a particular price.
LAW OF DEMAND
Consumers will increase the quantity demanded
Of a good or service as prices decrease, as prices
Increase consumers demand less.
CREATES DEMAND
Advertising
Ample supply
Prices
Convenient location
AFFECTS DEMAND
Change in consumers’ income
Change in consumers’ taste
Change in expectations of future conditions
Change in population
Change in certain segments of the population
SUPPLY
Is the quantity of a good or service that
businesses are willing and able to provide
within a range of prices that people
would be willing to pay.
LAW OF SUPPLY
As prices increases the quantity supplied
increases.
As price decreases that quantity supplied
decreases.
AFFECTS SUPPLY
Cost of production
Price people are willing to pay
Change in the number of producers
Price of related goods
A change in technology
A change in expectations
What is the likely effect on price in each case in the table below?
DEMAND
Very little demand DDD
but lots of supply
SUPPLY
SSSSSSSSSSSSSS
SSSSSSSSSSSSSS
SSSSSSSSSSSSSS
DDDDDDDDDDDD SSSS
DDDDDDDDDDDD
DDDDDDDDDDDD
PRICE
Lowering effect
On price
Lots of demand
but little supply
Higher price
possible
PRICE
Is affected by demand and supply.
Low prices increase demand.
High prices decrease demand.
DEMAND
Very little demand DDD
but lots of supply
SUPPLY
SSSSSSSSSSSSSS
SSSSSSSSSSSSSS
SSSSSSSSSSSSSS
DDDDDDDDDDDD SSSS
DDDDDDDDDDDD
DDDDDDDDDDDD
PRICE
Lowering effect
On price
Lots of demand
but little supply
Higher price
possible
SUGGESTIONS FOR DISCUSSION RE: DEMAND & SUPPLY & PRICE
Tickle Me Elmo
Gas
GAP clothing
Ticket to Toronto Maple Leaf’s hockey games (scalpers)
Rock Concert
Real Estate
Beanie Babies
Furbies
Real Estate
- lots of houses for sale (big supply)
- few people buying houses (low demand)
- creates a buyer’s market (lower selling prices)
OR
- few houses for sale (low supply)
- lots of people wanting to buy houses (high demand)
- creates a seller’s market (higher selling prices)
Toys
- Christmas shopping season often causes a shortages of a
favorite toy ...... people who want the toy are wiling to pay more
Explain how a business can be affected
by the number and quality of
competitors in a market.
PROFIT AND COMPETITION
Profit - the income that is left after all costs and expenses
are paid.
Expenses - expenditures that help a business generate
revenue; assets that are consumed in the process of generating
revenue.
Examples: Wages
Advertising
Heat
Hydro
Delivery
Equipment
Machinery
Building
Office supplies
Costs - the amount of money required for each stage of
production.
Example: Raw Materials for a manufacturer
Cost of Goods Sold for a retailer
Example: School Store
Chocolate bar
Selling price $1.00
Cost to buy - .64
Expenses - .10
_______
Profit
.26
Break even is where revenue = costs + expenses
The break even for the chocolate bar is 74 cents.
Solvent - having the ability to pay your debts.
Insolvency led to the closure of Eaton's
Bankruptcy - A state that is declared by a court of law when a
business is unable to pay its debts and its assets are
distributed among its creditors.
Competition - two or more businesses try to sell the same
product or service to the same customer.
Examples: auto industry, gas industry, long distance service, cell
phone service, soft-drinks, chocolate bars, Dept. Stores,
restaurants, pizza
Consumer benefits from competition:
Lower prices
Variety
Higher quality
Innovation
Efficient use of resources
Example: computer manufacturers
BUSINESS SURVIVAL
A business cannot survive unless it produces goods or services
that people need or want. The consumer decides who survives.
EXAMPLES OF BUSINESS THAT DID NOT SURVIVE
Eaton’s
Simpson’s
Corel Corp.
White Rose
Mother’s Pizza Biway
Obsolete - products or services no longer in use or in demand.
EXAMPLES
- typewriters
- VCR’s
- 8 track and cassette tapes
- turntables
- Pogs
- Furbies
- Pokemon
- Boneheads
- Mighty Beans
Business Survival Tactics:
- provide better service
- be on the lookout for new and better ways to do things
- change when consumers change
- watch for innovations
- cut costs
- be efficient
- reduce, reuse, recycle
Interdependence
Consumers and Businesses are dependent on each
other. Businesses are also dependent on other
businesses.
The restaurant owners in your community are
dependent on farmers, trades people, wholesalers,
educators, computer technicians.
UNIT 3
PERSONAL FINANCE
(MONEY)
Income and Benefits
Summarize the various ways in which
individuals and households acquire
income.
Describe the major factors that can
influence a job’s income level.
Describe other benefits of a job in
addition to income.
WHAT IS MONEY?
Without money businesses could not operate, and
consumers could not buy the goods and services
they need and desire.
Legal tender - must be accepted as payment for
goods and services (coins and paper money)
- cheques and credit cards are not legal tender
bank notes - paper money
-new series was introduced in
Canada recently
Counterfeiting - is the production of fake money
Security features of Canada's new bank notes
-raised ink
-iridescent maple leaves
-hidden number
-fluorescence
-unique texture easier for blind
medium of exchange - when people exchange money for goods and
services
barter - to trade one thing for another without using money
- with money we don't have to barter
- with money we can buy a variety of things where and when
we want without barter
standard of value - money helps us to determine how much goods
and services are worth
- money makes it easy to compare the value of
one thing with the value of another
- the value of all goods and services is measured
by their price
4 hours of labour X $8.00 an hour wages = one $32.00
computer game
store of value - money can be stored or saved for use in the
future
standard of future payment - money allows a consumer to
calculate the future value of a
current transaction
inflation - the reduction in purchasing power of a given amount
of money when wages and prices increase (money's
true value is its purchasing power)
- money's purchasing power changes as prices for
Goods and services change
- prices tend to rise so the dollar buys less from one
year to the next
SOURCES OF INCOME
- Allowance
- Work that you do
- Money that you earn on savings and investments
- Money that you receive from government social assistance
programs
- Gifts
- Inheritance
Employment Income
- working for an employer or for yourself as an entrepreneur
Factors affecting the amount of money you earn
- type of work you do
- level of education and skill
- work experience
- length of time on the job
- reliability and work habits
- how up-to-date your skills are
- demand for your skills
- labour market conditions
- employment rate
- salaries negotiated by unions
- job competition
- your employer's level of success
- personal performance
- uniqueness of abilities
- success of your entrepreneurial venture
Benefits of a job in addition to income
- skill development
- self-fulfilment
- identity
- social interaction
- feeling of accomplishment and self worth
- pension
- health insurance
- benefits (dental, drug, E I, LTD, life insurance)
- perks (car, travel, expense accounts, profit sharing)