商务英语综合教程课件杜凤秋 ISBN9787810788113 PPT international economychap.8 market economy.pptVIP

Market Economy Market Economy We will think of a market as a set of economic forces called supply and demand. Supply forces tend to bring goods and services into production. Demand forces tend to result in consumption of those goods and services. Supply and demand forces interact to form a price. Market Economy Definition: A market economy is an economic system in which prices determine how resources will be used and how products will be distributed. Also we can definite it an economy in which the free market is primarily used to determine resource allocation, prices and investments. Market Economy Supply Demand: In business demand means more than desire. In business, demands for a goods or service exists when there are people who both desire the goods or services; and have the buying power to purchase it; and they must also be willing to spend in order to acquire it. Market Economy The quantity demanded is the number of units buyers will buy at a certain price. The supply of a goods or service results from the efforts of producers. The quantity supplied is the number of units producers will offer for sale at a certain price. Supply Curve The law of supply states that the higher the price, the larger the quantity supplied, all other things constant. The law of supply is demonstrated by the upward slope of the supply curve. Supply Curve Shift Some supply-shifting factors include: Prices of other goods - the supply of one good may decrease if the price of another good increases, causing producers to reallocate resources to produce larger quantities of the more profitable good. Number of sellers - more sellers result in more supply, shifting the supply curve to the right. Prices of relevant inputs - if the cost of resources used to produce a good increases, sellers will be less inclined to supply the same quantity at a given price, and the supply curve will shift to the left. Technology - technological advances that increase production