What Affects Price? Entrepreneurship Unit 9, Lesson 1 Copyright © Texas Education Agency, All Rights Reserved

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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 Copyright © Texas Education Agency, All Rights Reserved 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 Copyright © Texas Education Agency, All Rights Reserved 4

Marginal Benefit and Marginal Cost Marginal Benefit - M easures the advantages of producing one additional unit of a good or service Marginal Cost - M easures the disadvantages of producing one additional unit of a good or service Copyright © Texas Education Agency, All Rights Reserved 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 Copyright © Texas Education Agency, All Rights Reserved 6

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. Copyright © Texas Education Agency, All Rights Reserved 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. Copyright © Texas Education Agency, All Rights Reserved 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.