1. The Role of the Consumer
Free Enterprise
The Role of the Consumer

2. Free Enterprise – The Role of the Consumer
Consumers do two major things in the marketplace:
Decide which Businesses Survive
Determine Prices

3. Role of the Consumer
PICK THE WINNER !

4. The Role of the Consumer – Decide Which Business Survives
Consumers pick the Winners
Every time consumers make a purchase, they “VOTE” with their dollars.
This “voting power” makes consumers powerful in Free Enterprise

5. Role of the Consumer
Determine Prices

6. The Role of the Consumer – Determine prices
Prices are determined much in part from the laws of Supply and Demand
Consumers play a major role in Supply and Demand
How So…..

7. The Role of the Consumer – SUPPLY AND DEMAND
DEMAND – Consumers willingness and ability to buy a product
SUPPLY – Amount of goods manufacturers are willing to make and sell

8. Role of the Consumer – SUPPLY AND DEMAND
As Supply and Demand interact, they create:
SURPLUS - Supply is greater than demand
SHORTAGE – When supply is less than demand
EQUILIBRIUM – When supply equals Demand

9. Role of Consumer – DEMAND CURVE$ 30 29
Price per Sweater 28 27
QTY
1000
2000
3000
4000
Number of Sweaters Demanded

10. Role of Consumer – SUPPLY CURVE$ 30 29
Price per Sweater 28 27
QTY
1000
2000
3000
4000
Number of Sweaters Supplied

11. Role of Consumer – SUPPLY and DEMAND CURVE
1100
1800
2400 $
3000
3800
3800
3000
-1100
-1800
1200 SHORTAGE
2700 SURPLUS 30
$29.50
SURPLUS 29
Price per Sweater
EQUILIBRIUM 28
$27.75
$27.25 27
SHORTAGE
QTY
1000
2000
3000
4000
Number of Sweaters Demanded / Supplied