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Chapter 4-6 Review
| Term | Definition |
|---|---|
| Demand | The amount of goods and services that consumers are willing and able to buy at various prices. |
| Equilibrium Price | The price at which the amount of an item supplied is equal to the amount demanded. |
| Law of Demand | The principle that consumers will generally buy less of an item at a higher price. |
| Law of Supply | The principle that suppliers will generally supply more of an item at a higher price. |
| Private Enterprise System | An economic system in which most resources are privately owned and decisions about production are made by individuals and groups rather than the government. |
| Motivations | Forces that cause businesses to act. |
| Competition | The contest between businesses to win customers. |
| Profit | The amount of money left over after a business has paid for the cost of producing its goods and services. |
| Market Economy | The basic economic decisions are based on the actions of the buyers and sellers in the market. |
| Price | The amount of money given or asked for when goods or services are bought or sold. |
| Supply | The amount of goods and services that producers will provide at various prices. |
| Surplus | An oversupply of goods or services that occurs when supply is greater than demand. |
| Shortage | An under-supply of of goods or services that occurs when supply is less than demand. |
| Producers | A business that creates or gathers raw materials for distribution. |
| Processors | A business that changes raw materials from their original forms into more finished forms. |
| Raw Goods | Materials gathered in their original state from natural resources such as land and water. |
| Processed Goods | Goods made from raw materials that may require further processing. |
| Manufacturers | A business that turns raw or processed goods into finished goods. |
| Finished Goods | Goods that require no further processing and are ready for the market. |
| Market | Any place where individuals buy and sell goods and services. |
| Intermediary | A business that moves goods from one business to another. |
| Wholesaler | A business that distributes goods by buying them from manufacturers in large quantities. |
| Retailer | A business that purchases goods from a wholesaler and resells them directly to the consumer. |
| Service Business | A business that provides services to consumers. |
| Price Competition | Competition on the basis of price such as: 1) Same product at a lower price 2) Better product at the same price 3) Better product at a lower price |
| Non-Price Competition | Competition based on the product's features and benefits rather than price. |
| Monopoly | A company that sells all or practically all of a product or service and, therefore, has little or no competition. |
Created by:
kdimmick
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