Entrepreneurs in a Market Economy

1
Entrepreneurs in a Market Economy

• Ms. Alexander
• Entrepreneurship

2
Economy

• Market Economy
• Individuals determine what is produced and what
  is available for consumers to purchase
• Command Economy
• The government determines what is produced and
  what is available for consumers to purchase

3
Supply Demand

• Supply
• Is how much of a good or service a producer is
  willing to produce at different prices.
• Demand
• Is an individuals need or desire for a product
  or service at a given price

4
Equilibrium Price Quantity

• Equilibrium price and quantity is the price at
  which supply equals demand

5
Fixed Costs

• Fixed costs are costs that must be paid
  regardless of how much of a good or service is
  produced.
• Examples of fixed costs include
• Rent
• Insurance fees
• Interest on loans

6
Variable Costs

• Variable costs are costs that go up and down
  depending on the quantity of the good or service
  produced.
• Examples of variable costs include
• Raw materials
• Labor
• Overhead directly related to producing goods or
  services.

7
Roles of Government

• Regulator
• To protect consumers
• Inspection
• Licenses
• Provider of Public Goods
• Everyone benefits
• Vaccinations
• Highway construction

8
Roles of Government

• Provider of Social Programs
• To help those in need
• Social Security
• Welfare
• Re-distributor of Income
• Reduces the chance of social problems due to low
  income
• Taxes