Transcript Document
Conducting Business in a Competitive Marketplace and in the Changing Workplace Market Conditions and Business Environments •Analyze the forces of supply and demand and Explain how they affect market prices and the Willingness of businesses to produce products. DEMAND, SUPPLY, AND PRICE Demand, Supply, and Price all affect one another. DEMAND Is the quantity of a good or service that consumers are willing and able to by at a particular price. LAW OF DEMAND Consumers will increase the quantity demanded Of a good or service as prices decrease, as prices Increase consumers demand less. CREATES DEMAND Advertising Ample supply Prices Convenient location AFFECTS DEMAND Change in consumers’ income Change in consumers’ taste Change in expectations of future conditions Change in population Change in certain segments of the population SUPPLY Is the quantity of a good or service that businesses are willing and able to provide within a range of prices that people would be willing to pay. LAW OF SUPPLY As prices increases the quantity supplied increases. As price decreases that quantity supplied decreases. AFFECTS SUPPLY Cost of production Price people are willing to pay Change in the number of producers Price of related goods A change in technology A change in expectations What is the likely effect on price in each case in the table below? DEMAND Very little demand DDD but lots of supply SUPPLY SSSSSSSSSSSSSS SSSSSSSSSSSSSS SSSSSSSSSSSSSS DDDDDDDDDDDD SSSS DDDDDDDDDDDD DDDDDDDDDDDD PRICE Lowering effect On price Lots of demand but little supply Higher price possible PRICE Is affected by demand and supply. Low prices increase demand. High prices decrease demand. DEMAND Very little demand DDD but lots of supply SUPPLY SSSSSSSSSSSSSS SSSSSSSSSSSSSS SSSSSSSSSSSSSS DDDDDDDDDDDD SSSS DDDDDDDDDDDD DDDDDDDDDDDD PRICE Lowering effect On price Lots of demand but little supply Higher price possible SUGGESTIONS FOR DISCUSSION RE: DEMAND & SUPPLY & PRICE Tickle Me Elmo Gas GAP clothing Ticket to Toronto Maple Leaf’s hockey games (scalpers) Rock Concert Real Estate Beanie Babies Furbies Real Estate - lots of houses for sale (big supply) - few people buying houses (low demand) - creates a buyer’s market (lower selling prices) OR - few houses for sale (low supply) - lots of people wanting to buy houses (high demand) - creates a seller’s market (higher selling prices) Toys - Christmas shopping season often causes a shortages of a favorite toy ...... people who want the toy are wiling to pay more Explain how a business can be affected by the number and quality of competitors in a market. PROFIT AND COMPETITION Profit - the income that is left after all costs and expenses are paid. Expenses - expenditures that help a business generate revenue; assets that are consumed in the process of generating revenue. Examples: Wages Advertising Heat Hydro Delivery Equipment Machinery Building Office supplies Costs - the amount of money required for each stage of production. Example: Raw Materials for a manufacturer Cost of Goods Sold for a retailer Example: School Store Chocolate bar Selling price $1.00 Cost to buy - .64 Expenses - .10 _______ Profit .26 Break even is where revenue = costs + expenses The break even for the chocolate bar is 74 cents. Solvent - having the ability to pay your debts. Insolvency led to the closure of Eaton's Bankruptcy - A state that is declared by a court of law when a business is unable to pay its debts and its assets are distributed among its creditors. Competition - two or more businesses try to sell the same product or service to the same customer. Examples: auto industry, gas industry, long distance service, cell phone service, soft-drinks, chocolate bars, Dept. Stores, restaurants, pizza Consumer benefits from competition: Lower prices Variety Higher quality Innovation Efficient use of resources Example: computer manufacturers BUSINESS SURVIVAL A business cannot survive unless it produces goods or services that people need or want. The consumer decides who survives. EXAMPLES OF BUSINESS THAT DID NOT SURVIVE Eaton’s Simpson’s Corel Corp. White Rose Mother’s Pizza Biway Obsolete - products or services no longer in use or in demand. EXAMPLES - typewriters - VCR’s - 8 track and cassette tapes - turntables - Pogs - Furbies - Pokemon - Boneheads - Mighty Beans Business Survival Tactics: - provide better service - be on the lookout for new and better ways to do things - change when consumers change - watch for innovations - cut costs - be efficient - reduce, reuse, recycle Interdependence Consumers and Businesses are dependent on each other. Businesses are also dependent on other businesses. The restaurant owners in your community are dependent on farmers, trades people, wholesalers, educators, computer technicians. UNIT 3 PERSONAL FINANCE (MONEY) Income and Benefits Summarize the various ways in which individuals and households acquire income. Describe the major factors that can influence a job’s income level. Describe other benefits of a job in addition to income. WHAT IS MONEY? Without money businesses could not operate, and consumers could not buy the goods and services they need and desire. Legal tender - must be accepted as payment for goods and services (coins and paper money) - cheques and credit cards are not legal tender bank notes - paper money -new series was introduced in Canada recently Counterfeiting - is the production of fake money Security features of Canada's new bank notes -raised ink -iridescent maple leaves -hidden number -fluorescence -unique texture easier for blind medium of exchange - when people exchange money for goods and services barter - to trade one thing for another without using money - with money we don't have to barter - with money we can buy a variety of things where and when we want without barter standard of value - money helps us to determine how much goods and services are worth - money makes it easy to compare the value of one thing with the value of another - the value of all goods and services is measured by their price 4 hours of labour X $8.00 an hour wages = one $32.00 computer game store of value - money can be stored or saved for use in the future standard of future payment - money allows a consumer to calculate the future value of a current transaction inflation - the reduction in purchasing power of a given amount of money when wages and prices increase (money's true value is its purchasing power) - money's purchasing power changes as prices for Goods and services change - prices tend to rise so the dollar buys less from one year to the next SOURCES OF INCOME - Allowance - Work that you do - Money that you earn on savings and investments - Money that you receive from government social assistance programs - Gifts - Inheritance Employment Income - working for an employer or for yourself as an entrepreneur Factors affecting the amount of money you earn - type of work you do - level of education and skill - work experience - length of time on the job - reliability and work habits - how up-to-date your skills are - demand for your skills - labour market conditions - employment rate - salaries negotiated by unions - job competition - your employer's level of success - personal performance - uniqueness of abilities - success of your entrepreneurial venture Benefits of a job in addition to income - skill development - self-fulfilment - identity - social interaction - feeling of accomplishment and self worth - pension - health insurance - benefits (dental, drug, E I, LTD, life insurance) - perks (car, travel, expense accounts, profit sharing)