Business: Supply and Demand and Demand Price Essay

Submitted By JaneKim1
Words: 932
Pages: 4

Lesson 1.1 – Business Fundamentals
Goods, Services, Needs, Wants
Goods and Services – What is the difference?
Goods
* Tangible products, meaning they can be seen or touched * Example: Burger, car, make up, jewellery, hockey stick
Services
* The product is not tangible, but is an act or service provided to the consumer * Example: Painter, doctor
All Goods and Services can be broken down into 2 categories
Needs
* A product that is a necessity to survive * Example: Water, shelter, food
Wants
* A product is not a necessity, but adds comfort or pleasure to your life * Example: Phone, computer, mansion, brand-name clothing
Consumer
* A general term used to describe anyone who purchase something from a business * Example: Groceries, phone bill
People who purchase a new computer (good)
People who have their computer repaired at a local repair shop (service)
What impacts consumer Needs and Wants? * Personality and personal interest (Country/Rap Music, Hockey/Soccer) * Individual priorities and values * Individual’s stage of life * Family responsibilities * Trends and Fads (may be technology, media, etc.)
Consumer Trends and Fads * Trends: Usually lasts 3 or more years * Fads: Usually lasts for a short period of time

Consumer Trends * The 1970’s began the trend of more women entering the work force.
Television Trends * Reality TV (Survivor, American Idol, Bachelor, etc.)
Automobile Trends * Eco-Friendly, Hybrids, Minivans, TV in cars, SUV’s
Fashion Trends * Jeans, sweats
Fashion Fads * Mullets, crocs, tye-dye, heelies
Toy Fads * Furbies, Bayblades, rubix cube, Hot Wheels, yo-yo’s, hula hoops

Lesson 1.2 – Supply and Demand
What things or factors affect your decision on whether or not to buy a product or service? * Necessity - Variety or choice * Price or cost - How much I can afford to spend on this item * Quality
*Consumer’s decision whether or not to buy a product or service
Business Addressing Needs and Wants * The… * Amount of a Good or Service that consumers demand * Amount of a Good or Service that suppliers supply * Price of a Good or Service …. All affect one another!
Scarcity… who gets what? * Society’s Needs and Wants are unlimited but… * The resources to produce, pay for or satisfy them is limited * This phenomenon is known as scarcity (Scarcity forces nations and societies to try and figure out how to best serve or try and satisfy the unlimited Needs and Wants that exist) * This plays a big part in helping to determine what a proper price is for a given product or service.
Law of Supply * As the price of a good or service rises, the quantity of that good or service supplied rises. * As the price of a good or service falls, the quantity of that good or service supplied falls * What does this mean? * If the price increases and consumers still buy, businesses will produce more. * If prices decrease and erode, or eliminate the profits, businesses will produce less.
SUPPLY
SUPPLY
PRICE
PRICE
SUPPLY
SUPPLY
PRICE
PRICE

* As the price of a good or service rises, the quantity of that good or service demanded falls. (higher price, less buyers) * As the price of a good or service falls, the quantity of that good or service demanded rises. (lower prices, more buyers) What does this mean? * Price is low, consumers will buy more * Price is high, consumers buy less DEMAND
DEMAND
PRICE
PRICE
DEMAND
DEMAND
PRICE
PRICE

Equilibrium * The price at which the quantity demanded by buyers equals the quantity supplied by sellers * Every buyer finds a seller and every seller finds a buyer (not always) Demand = Supply…