This document discusses key economic concepts related to business ownership and entrepreneurship. It defines entrepreneurship and explains the profit motive. It describes how supply, demand, and scarcity affect businesses and equilibrium in the market. It also outlines the government's role in regulating business through various programs, laws, and intellectual property protections.
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This document discusses key economic concepts related to business ownership and entrepreneurship. It defines entrepreneurship and explains the profit motive. It describes how supply, demand, and scarcity affect businesses and equilibrium in the market. It also outlines the government's role in regulating business through various programs, laws, and intellectual property protections.
This document discusses key economic concepts related to business ownership and entrepreneurship. It defines entrepreneurship and explains the profit motive. It describes how supply, demand, and scarcity affect businesses and equilibrium in the market. It also outlines the government's role in regulating business through various programs, laws, and intellectual property protections.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
This document discusses key economic concepts related to business ownership and entrepreneurship. It defines entrepreneurship and explains the profit motive. It describes how supply, demand, and scarcity affect businesses and equilibrium in the market. It also outlines the government's role in regulating business through various programs, laws, and intellectual property protections.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
Download as ppt, pdf, or txt
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Entrepreneurship
Understanding basic economic concepts
related to business ownership Students will understand basic economic concepts related to business ownership
Students will be able to:
• Define entrepreneurship • Explain the profit motive • Describe effects of supply, demand and scarcity on businesses • Graph supply and demand curves • Describe concept of equilibrium • Explain the role of competition and how “market structure” (i.e., monopolies) affects price • Describe government’s role in business Entrepreneurship
The process of getting into and operating one’s
own business Profit Motive
Profit: Money left after all the
expenses of a business have been deducted from the income
Making a profit is a primary
incentive of the free enterprise system. It is one way of measuring success in a free enterprise system. Effects of Supply on Businesses
Supply: The amount of a good or service that producers are
willing to produce
The more money that can be charged for
each item . . . the more units the supplier is willing to produce. Effects of Demand on Businesses
Demand: The amount or quantity of goods or services that
consumers are willing and able to buy
As the price continues to rise . . . the less
units the consumer is willing to buy. Effects of Scarcity on Businesses
Scarcity: When wants are greater than resources
Concept of Equilibrium
Equilibrium: Point at which consumers buy all of a product
that is supplied, leaving neither a surplus nor a shortage
Equilibrium Contributions by Small Business Owners and Entrepreneurs
• Provide jobs • Turn demand into supply • Principal source of venture capital • Change society • Fill unmet needs • Contribute to the overall good of the nation • Make life more pleasant to consumers • Technological change • Increased productivity The Role of Competition and How It Affects Price
Competition: Businesses striving for the same
customer or market
Competition between similar businesses is a key
element in a market economy. It forces companies to become more efficient. It also keeps prices down and quality up.
Not all markets are competitive
How “Market Structure” Affects Price (i.e., monopolies)
Monopoly: When a company controls
all of a market. There is no competition.
A company that has a monopoly is
able to charge more than a company that has to compete with other companies.
Consumers have nowhere else to Microsoft’s Bill Gates
go. They will continue to buy a In 1998, the US Dept of Justice filed an anti-trust lawsuit against Microsoft. product or service, even if the See Wikipedia for more information. producer raises prices. Government’s Role in Business
The government has an effect on what is produced by:
Purchases: Government purchases huge amounts of goods
and services
Taxes: Government taxes certain goods and services
– Sales tax on retail – Extra charge on cigarettes, gasoline, and alcoholic beverages
Subsidies: Payment to producers of certain kinds of goods
– Agricultural products, businesses that locate their businesses in certain inner-city neighborhoods Government Programs and Laws to Protect Consumers
Inspection: USDA-inspects meat and poultry plants to ensure appropriate hygienic measures are being observed OSHA-inspects factories to ensure that conditions are safe for workers Licenses: Government regulates by requiring some businesses to obtain licenses – Barber and Beauticians, Real Estate, and more…
To obtain a license, professionals must pass examinations
and pay licensing fees before they can start their business Laws Enacted by the Government to Protect the Consumer
Equal Employment Opportunity Commission (EEOC)
Charged with protecting the rights of employees age, race, color or national origin, religion, gender or physical challenge
Equal Pay Act of 1963
All employers must pay men and women the same wage for the same work
Fair Labor Standards Act of 1938
Minimum wage and maximum working hours are identified. Children under 16 years of age could not be employed full-time except by their parents. Laws Enacted by the Government to Protect the Consumer (cont’d.)
Occupational Safety & Health Act (OSHA)
Ensuring safe and healthy working conditions for employees
Price Discrimination (Clayton Act of 1914 & Robinson-Patman Act
of 1936) When a business cannot sell the same product to different people at different prices
Food and Drug Administration (FDA)
Monitoring product safety More Laws Enacted by the Government to Protect the Consumer
Consumer Product Safety Commission (CPSC)
Watchdog for consumers over products that may be hazardous
Fair Packaging and Labeling Act
Requires that manufacturers labels truthfully list all raw materials used in the production of products
Uniform Commercial Code (UCC)
Groups of laws that covers everything from sales to bank deposits and investment securities. This applies to sales transactions between merchants. Protect Your Invention/Business
The government has created laws to protect the entrepreneurs’
ideas and intellectual property
Patent: A legal document that gives an inventor the sole right to
produce, use, and sell an invention. A patent lasts for 20 years. During this period, no business or individual can copy or sue the patented invention without the patent holder’s permission.
Copyright: Protects original works of an author. (e.g., music,
books, computer software.) A copyright lasts for 70 years after the death of the author.
Trademark: Word, symbol, design, or combination of these that a
business uses to identify itself or something it sells. Let’s Review
• Define entrepreneurship • Explain the profit motive • Describe the effects of supply, demand and scarcity on businesses • Graph a supply and demand curve • Describe concept of equilibrium • Describe the impact of small business/entrepreneur’s contributions • Explain the role of competition and how does “market structure” (i.e., monopolies) affects price • Describe government’s role in business
