Marketing Dynamics-Chapter 3 Study Guide  THE  FREE  ENTERPRISE  SYSTEM

Profit  As _______ increases, risks increase

Competition-  the struggle between companies for customers

Consumers-  person who uses the product.

Consumers  decide whether or not a business will survive.

Federal Reserve Board-  has the power to control the U. S. monetary supply.

Federal Trade Commission-  investigates deceptive and misleading business practices, like false advertising.

Four roles that our government plays in our free enterprise and an example of each.-  PROVIDER OF GENERAL SERVICES - Public Libraries,  Supporter Of Businesses -runs Small Business Administration & establishes trade alliances and agreements with other countries,

 REGULATOR-FDA,EEOC,OSHA, CPSC- Consumer Product Safety Commission and  COMPETITOR-TVA, U. S. Postal Service competes with DHL, UPS and Federal Express, Amtrak.

Free enterprise system-  encourages individuals to start and operate their own businesses without government involvement.

Function of licensing agreement-  protects businesses and individuals from unauthorized copying

Math skills- how to figure profit  Sales-2,456,700  Costs-1,246,100 +Expenses-1,112,332  98,268  Subtract Costs & expenses from Sales

Math skills-how to figure loss  Business B –Revenues 2,000,00- Expenses 2,025,000  Loss of 25, 000  Subtract expenses from revenue

Name the regulatory agencies that have been set up by the government-  Food and Drug Administration  Equal Employment Opportunity Commission  Occupational Safety and Health Administration

Name three major businesses that make our government a competitor in the market place-  Tennessee Valley Authority,  Amtrak and  U. S. Postal Service

Non price competition-  when businesses choose to compete on the basis of factors not related to price

OSHA-  Occupational Safety and Health Administration is a governmental regulatory agency created to protect employees.

Price competition-  focuses on the sale price of a product.

Price competition example-  Price Match at Wal- Mart with any grocery store

Profit-  the money earned from conducting business after all costs and expenses have been paid.

Risk-  the potential for loss or failure in relation to the potential for improved earnings.

Securities and Exchange Commission-  responsible for regulating the sale of stocks and bonds.

Sherman Antitrust Act-  was created to prevent monopolies.

Shortages-  occur when demand exceeds supply

Surpluses-  occurs when the supply of goods exceeds demand

The government  is the single largest U. S. consumer of goods and services.