MARKETING BEGINS WITH ECONOMICS CHAPTER 03 4/17/2017 MARKETING BEGINS WITH ECONOMICS 3.1 Scarcity and Private Enterprise 3.2 Observing the Law of Supply and Demand 3.3 Types of Economic Competition 3.4 Enhancing Economic Utility © South-Western Publishing MARKETING

SCARCITY AND PRIVATE ENTERPRISE GOALS for Lesson 3.1 Identify the basic economic problem. Describe how America’s private enterprise economy works. © South-Western Publishing

The Importance of Economic Understanding The basic economic problem Who makes the decisions? Controlled economy—government Regulated economy—shared Free economy—individuals Mixed economy—shared by government and private enterprise © South-Western Publishing

America’s Private Enterprise Economy Characteristics Consumers Producers Government Economic forces © South-Western Publishing

OBSERVING THE LAW OF SUPPLY AND DEMAND GOALS for Lesson 3.2 Explain microeconomics and concept of consumer demand. Identify factors that affect supply and its relationship to demand. © South-Western Publishing

Macroeconomics Macroeconomics studies the economic behavior and relationships of the entire society. © South-Western Publishing

Microeconomics Microeconomics is the study of relationships between individual customers and producers. © South-Western Publishing

Microeconomics and Consumer Demand Factors affecting demand Analyzing demand curves Demand curve Law of demand Economic market © South-Western Publishing

Demand Curve for Movies Price $10.50 9.00 7.50 6.00 4.50 3.00 1.50 1,000 Quantity 2,000 3,000 4,000 5,000 6,000 7,000 © South-Western Publishing

Supplying the Product Handling the competition Analyzing supply curve Law of supply © South-Western Publishing

Supply Curve for Watches Price $105 90 75 60 45 30 15 10,000 Quantity 20,000 30,000 40,000 50,000 60,000 70,000 80,000 © South-Western Publishing

Intersecting Supply and Demand Market price © South-Western Publishing

Demand Curve for Notebook Computers Price $2,100 1,800 1,500 1,200 900 600 300 100 Quantity 200 400 500 700 800 © South-Western Publishing

Supply Curve for Notebook Computers Price $2,100 1,800 1,500 1,200 900 600 300 100 Quantity 200 400 500 700 800 © South-Western Publishing

Market Price for Notebook Computers $2,100 1,800 1,500 1,200 900 600 300 100 Quantity 200 400 500 700 800 Demand Supply © South-Western Publishing

TYPES OF ECONOMIC COMPETITION GOALS for Lesson 3.3 Define pure competition and monopoly. Explain the characteristics of oligopolies and monopolistic competition. © South-Western Publishing

All-Out Competition or No Competition At All Pure competition Monopoly © South-Western Publishing

Demand Curve for One Company in Pure Competition Price Quantity © South-Western Publishing

Demand Curve for a Monopoly Price Quantity © South-Western Publishing

Between the Extremes Oligopolies Monopolistic competition Understanding the competition © South-Western Publishing

Demand Curve for One Company in an Oligopoly Price Quantity © South-Western Publishing

Demand Curve for the Industry in an Oligopoly Price Quantity © South-Western Publishing

Demand Curve for Monopolistic Competition with Few Product Differences Price Quantity © South-Western Publishing

Demand Curve for Monopolistic Competition with Greater Product Differences Price Quantity © South-Western Publishing

ENHANCING ECONOMIC UTILITY GOALS for Lesson 3.4 Define various types of economic utility. Explain how marketers use utility to increase customer satisfaction. © South-Western Publishing

Utility Means Satisfaction Economic utility Form utility Time utility Place utility Possession utility © South-Western Publishing