Marketing Dynamics-Chapter 3 Marketing Dynamics-Chapter 3 Study GuideStudy Guide

THE THE FREEFREEENTERPRISEENTERPRISESYSTEMSYSTEM

ProfitProfit

As _______ As _______ increases, risks increases, risks increaseincrease

Competition-Competition-

the struggle the struggle between companies between companies for customersfor customers

Consumers-Consumers-

person who uses the product.person who uses the product.

ConsumersConsumers

decide whether or not a business will decide whether or not a business will survive.survive.

Federal Reserve Board-Federal Reserve Board-

has the power to control the U. S. has the power to control the U. S. monetary supply.monetary supply.

Federal Trade Commission-Federal Trade Commission-

investigates deceptive and misleading investigates deceptive and misleading business practices, like false business practices, like false advertising.advertising.

Four roles that our government plays in Four roles that our government plays in our free enterprise and an example of our free enterprise and an example of

each.-each.- PROVIDER OF GENERAL SERVICES -PROVIDER OF GENERAL SERVICES -

Public Libraries, Public Libraries, Supporter Of Businesses -runs Small Supporter Of Businesses -runs Small

Business Administration & establishes Business Administration & establishes trade alliances and agreements with trade alliances and agreements with other countries, other countries,

REGULATOR-FDA,EEOC,OSHA, CPSC-REGULATOR-FDA,EEOC,OSHA, CPSC-Consumer Product Safety Commission Consumer Product Safety Commission and and

COMPETITOR-TVA, U. S. Postal Service COMPETITOR-TVA, U. S. Postal Service competes with DHL, UPS and Federal competes with DHL, UPS and Federal Express, Amtrak.Express, Amtrak.

Free enterprise system-Free enterprise system-

encourages individuals to start and encourages individuals to start and operate their own businesses without operate their own businesses without government involvement.government involvement.

Function of licensing Function of licensing agreement-agreement-

protects businesses and individuals protects businesses and individuals from unauthorized copyingfrom unauthorized copying

Math skills- how to figure profitMath skills- how to figure profit

Sales-2,456,700Sales-2,456,700 Costs-1,246,100 +Expenses-1,112,332Costs-1,246,100 +Expenses-1,112,332 98,26898,268

Subtract Costs & expenses from SalesSubtract Costs & expenses from Sales

Math skills-how to figure lossMath skills-how to figure loss

Business B –Revenues 2,000,00- Business B –Revenues 2,000,00- Expenses 2,025,000 Expenses 2,025,000

Loss of 25, 000Loss of 25, 000

Subtract expenses from revenueSubtract expenses from revenue

Name the regulatory agencies that Name the regulatory agencies that have been set up by the government-have been set up by the government-

Food and Drug AdministrationFood and Drug Administration Equal Employment Opportunity Equal Employment Opportunity

CommissionCommission Occupational Safety and Health Occupational Safety and Health

AdministrationAdministration

Name three major businesses that Name three major businesses that make our government a competitor in make our government a competitor in

the market place-the market place-

Tennessee Valley Authority,Tennessee Valley Authority, Amtrak and Amtrak and U. S. Postal ServiceU. S. Postal Service

Non price competition-Non price competition-

when businesses choose to compete when businesses choose to compete on the basis of factors not related to on the basis of factors not related to priceprice

OSHA-OSHA-

Occupational Safety and Health Occupational Safety and Health Administration is a governmental Administration is a governmental regulatory agency created to protect regulatory agency created to protect employees.employees.

Price competition-Price competition-

focuses on the sale focuses on the sale price of a product.price of a product.

Price competition example-Price competition example-

Price Match at Wal-Price Match at Wal-Mart with any Mart with any grocery storegrocery store

Profit-Profit-

the money earned the money earned from conducting from conducting business after all business after all costs and expenses costs and expenses have been paid.have been paid.

Risk-Risk-

the the potential for loss potential for loss or failure in relation or failure in relation to the potential for to the potential for improved earnings.improved earnings.

Securities and Exchange Securities and Exchange Commission-Commission-

responsible for responsible for regulating the sale regulating the sale of stocks and of stocks and bonds.bonds.

Sherman Antitrust Act-Sherman Antitrust Act-

was created to prevent monopolies.was created to prevent monopolies.

Shortages-Shortages-

occur when demand exceeds supplyoccur when demand exceeds supply

Surpluses-Surpluses-

occurs when the supply of goods occurs when the supply of goods exceeds demandexceeds demand

The The governmentgovernment

is the single largest U. is the single largest U. S. consumer of goods S. consumer of goods and services.and services.