Unit 2- Economic Foundations Flashcards
What is Supply?
Supply is the quantity of a good or service that producers are willing and able to sell at various prices during a given period.
Supply represents the producer’s willingness to sell
Supply is also affected by the price
What is Demand?
Demand is the quantity of a good or service that customers are willing and able to purchase at various prices during a given period.
Demand reflects consumers’ desire
Demand varies with price
What is Market Equilibrium
Market equilibrium is the point where the supply and demand curves intersect, indicating the equilibrium price and quantity.
It’s achieved at the price at which quantities demanded and supplied are equal.
At equilibrium, there is no surplus (B) or storage (A)
What is Surplus?
“A Lot”
More than something is needed and a disconnect between supply and demand
For-Profit?
Profit is the financial benefit gained when a company earns more than it spends to operate the business.
A business that produces or sells goods/services to satisfy the needs wants and demands of consumers to make a profit.
PROFIT = REVENUE - EXPENSES
When a business makes a profit, it can:
- Reinvest money for expansion
- Provide improved goods and services
- Give the owners(s) funds to spend on personal needs or wants
Non-Profit?
Raises funds for a specific goal
Service people/communities
Charities/charitable organizations
Sole Proprietorship?
Business/ company owned by ONE person?
Partnership?
Owned by two or more people
Corporation?
An artificial “person” established to do business
Co-operative?
Owned by its workers or members who buy from the business
Franchise?
When a business licenses another to use its name, operating procedure, etc. under an above form of ownership
