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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

Unit 1: Going Into Business For Yourself

Chapter 1: What is Entrepreneurship?

the main idea
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
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
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
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
slide6

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
  • Competition is good for consumers because it provides choices, forces improved quality and efficiency and leads to a surplus, which brings prices down.
market structures
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
Basic Economic Concepts
  • Goods and Services: Goods are tangible while services are intangible
  • Scarcity: occurs when demand exceeds supply
ownership
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
laws of supply and demand generally determine the price of a product
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
market behavior
Market behavior
  • What happens to the price of air conditioners in the summer? fall?
  • When are bathing suits most expensive? Why?
competition1
Competition
  • Keeps prices down and quality high
  • The consumer benefits from competition. How?
  • The opposite is called a monopoly
summary
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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