Unit 1 going into business for yourself
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Unit 1: Going Into Business For Yourself. Chapter 1: What is Entrepreneurship?. The Main Idea. Entrepreneurship is the primary catalyst for economic growth. To be successful requires an understanding of how the economy works. Small Business and Entrepreneurship.

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Unit 1: Going Into Business For Yourself

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Unit 1: Going Into Business For Yourself

Chapter 1: What is Entrepreneurship?


The Main Idea

  • Entrepreneurship is the primary catalyst for economic growth. To be successful requires an understanding of how the economy works.


Small Business and Entrepreneurship

  • Entrepreneur: individual who undertakes the creation, organization and ownership of a business. He or she also accepts the risks and responsibilities

  • Venture: A new business undertaking that involves risk

  • Entrepreneurship: the process of recognizing an opportunity, testing it on the market, and gathering the necessary resources to go into business

  • More than 90% of all businesses today are considered small businesses, with 62% being home-based.


Economic Systems

  • 4 Fundamental Questions:

  • What goods and services should be produced?

  • What quantity of goods and services should be produced?

  • How should goods and services be produced?

  • For whom should goods and services be produced?


Free Enterprise System

  • People have an important right to make economic choices ( the U.S)

    • People can choose what products to buy

    • People can choose to own private property

    • People are free to start a legal business and compete with other businesses

    • Also known as Capitalism or a Market Economy


The Profit Motive: making a profit is a primary incentive of free enterprise.Profit is money left over after all expenses have been paid.


Competition

  • Competition is good for consumers because it provides choices, forces improved quality and efficiency and leads to a surplus, which brings prices down.


Monopoly

a market structure in which a product has only one seller who has total control over supply and most prices

Oligopoly

A market structure in which there are just a few competing firms

Market Structures


Basic Economic Concepts

  • Goods and Services: Goods are tangible while services are intangible

  • Scarcity: occurs when demand exceeds supply


Ownership

  • Ownership is powerful

  • You can open any business you create

  • You can keep all the profits

  • It is your choice

  • You can sell “shares”

  • You can donate


Supply and Demand“How Free Enterprise Works”


Supply (S): quantities available to consumers at various prices

If everything else remains the same, businesses will supply more at higher prices than at lower ones

As P increases, QS increases

Demand (D):quantities that consumers would be willing to buy at various prices.

If everything else remains the same, people will demand more at lower prices than higher ones

As P increases, QD decreases

Laws of Supply and Demandgenerally determine the price of a product


Supply graph example


Demand graph example


Market behavior

  • What happens to the price of air conditioners in the summer? fall?

  • When are bathing suits most expensive? Why?


EquilibriumAlso known as Market Clearing Price.Occurs where the D and S curves meet


Competition

  • Keeps prices down and quality high

  • The consumer benefits from competition. How?

  • The opposite is called a monopoly


Summary

  • Overall, use Supply and Demand as guides

  • If D decreases, the market may be telling you to change your product or lower Price

  • If Supply increases, prices may fall


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