Principles of Business, Marketing, and Finance Lesson Nine Producers in a Private Enterprise System...
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Transcript of Principles of Business, Marketing, and Finance Lesson Nine Producers in a Private Enterprise System...
Principles of Business, Marketing, and FinancePrinciples of Business, Marketing, and FinanceLesson NineLesson NinePrinciples of Business, Marketing, and FinancePrinciples of Business, Marketing, and FinanceLesson NineLesson Nine
Producers in a Private Enterprise SystemProducers in a Private Enterprise System
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Basic Economic ProblemBasic Economic Problem
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Questions Economies Must Questions Economies Must AnswerAnswer
Questions Economies Must Questions Economies Must AnswerAnswer
What goods and services will be produced?
How will they be produced?
For whom will they be produced?
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Economic SystemsEconomic Systems
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America’s Private Enterprise America’s Private Enterprise SystemSystem
America’s Private Enterprise America’s Private Enterprise SystemSystem
Based on independent decisions by businesses and consumers with only a limited government role regulating those relationships
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America’s Private Enterprise America’s Private Enterprise SystemSystem
America’s Private Enterprise America’s Private Enterprise SystemSystem
Characteristics of Private Enterprise– resources of production are owned and controlled by
individual producers– Producers use the profit motive to decide what to
produce-use of resources to obtain the greatest profit– Individual consumers make decisions about what will
be purchased to satisfy needs– Consumers use value in deciding what to consume– Government stays out of exchange activities between
producers and consumers unless it is clear that individuals or society are harmed by the decision
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ConsumersConsumersConsumersConsumers
Individuals who purchase products and services to satisfy needs
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DemandDemandDemandDemand
a relationship between the quantity of a product consumers are willing and able to
purchase and the price
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ProducersProducersProducersProducers
businesses that use their resources to develop products and services to consumers for profit– Supply-relationship between the quantity of a product
that producers are willing and able to provide and the price
– Determine the needs and demands of consumers
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GovernmentGovernmentGovernmentGovernment
least amount of involvement in free enterprise systemleast amount of involvement in free enterprise system
some regulationssome regulations
use taxes for servicesuse taxes for services
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Business Customer Business Customer ClassificationsClassifications
Business Customer Business Customer ClassificationsClassifications
Extractors-1.2 million businessesExtractors-1.2 million businesses– farms and ranches– mining companies– oil refineries– manufacturers of business and consumer products– construction-largest production category-over 700,000
companies – small-less than $10,000 a year on purchases– large-employ several hundred thousand people
worldwide and may easily spend $10 million in one day on purchases
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Business Customer Business Customer ClassificationsClassifications
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Forms of ProductionForms of ProductionForms of ProductionForms of Production
Extraction and cultivation -products are obtained from nature or grown using
natural resources
Processing -changing and improving the form of another product
Manufacturing -combines raw materials and processed goods into
finished product
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