Presentation on theme: "1 Foundations of Business In order to appreciate and make informed decisions in the world around them, students will need to establish a basic business/economic."— Presentation transcript:
1 Foundations of Business In order to appreciate and make informed decisions in the world around them, students will need to establish a basic business/economic foundation.
2 1-4 Economic Resources and Systems Why is understanding economic resources and systems essential to businesses?
3 Opening Questions 1. What resources are used to produce the items that you listed as your wants and needs? 2. Thinking about your list of wants yesterday – what would you be willing to keep and what would you be willing to give up (keep in mind you have limited $$$)
4 Explain Supply Explain Demand Identify how supply and demand control price Targets
5 Price goes UP! How is Price an indication of Scarcity? If something is in short supply But, Demand is high Price will ????? The Market and Price
6 Price Amount of money given or asked for when goods and services are bought or sold.
7 Law of Demand Consumers are the ones who provide the demand for the good. Demand (Curve) Amount or quality of goods and services that consumers are willing to and able to buy at various prices. Law of Demand People choose to buy more of something at lower prices than at higher prices.
8 Higher Demand Lower Demand Higher Price Lower Price Law of Demand CAUSES
9 Law of Supply Producers are influenced to supply goods and services by the prices in the market. Supply (Curve) Amount or quality of goods and services that producers are willing to provide at various prices. Law of Supply Producers choose to sell more of something at a higher price than at a lower price.
10 Higher Price Lower Price More Supply Less Supply Law of Supply CAUSES
11 How is Price Determined? Consumers want to get as much as possible for the LOWEST possible price. Producers want to make as much PROFIT as possible on the items that are produced. Where is the Happy Medium????
12 Equilibrium Price The price at which the amount supplied and the amount demanded meet, or come together.
13 Demand Supply Equilibrium Price
14 The Market and Price Surplus Over supply of a product. Consumer demand is lower than the amount supplied What will happen to the price when the seller sees that there is a SURPLUS? Price will go ???? until it hits the equilibrium price.
15 The Market and Price Shortage: Under supply of a product. Consumer demand is higher than the amount supplied What will happen to the price when the seller sees that there is a SHORTAGE? Price will go ???? until it hits the equilibrium price.
16 Explain the Law of Supply and Law of Demand. Law of Supply – Producers choose to sell more of something at a higher price than at a lower price Law of Demand – Consumers choose to buy more of something at a lower price than at a higher price Discuss how prices are determined (Equilibrium Price) Price at which the amount supplied and the amount demanded meet Targets Review