Key Economic Principles of Free Enterprise

Ms. Cichon

Free Enterprise

System in which economic agents are free to own property and engage in commercial

transaction

Effective Managers…

• They are able to identify the needs of consumers and adjust their agribusinesses to meet those needs quickly and efficiently

Economic Principle

Basic premises that explain the free enterprise system

Diminishing Marginal Utility

When a product or service is consumed, a time comes when the utility (or pleasure or benefit) of consuming that product or service declines.

Demand

Relationship between price and quantity that illustrates how much consumers are willing

and able to purchase at various prices.

Demand

Demand Shift

Supply

Relationship between price and quantity that illustrates how much producers are willing to

supply at various prices

Supply

Supply Shift

Equilibrium Price and Quantity

Point at which the supply and demand schedules intersect and at which the quantity offered for sale matches exactly the quantity

that consumers are willing to purchase.

Equilibrium Price and Quantity

Equilibrium Price and Quantity

Economic Opportunities

Possible business prospects available in today’s global economy