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Week One Summary Report
This week we have learned that the nature of U.S. business is private enterprise and it is considered a mixed market economy. Its basic goals are stability, full employment and growth. There are various global economies such as market, mixed market and planned economies. A market economy is where the buyers and sellers do business based on the freedom of choice. A planned economy is regulated and controlled by the government who has complete control of all resources and production. A mixed market economy incorporates elements of both planned and market environments. Supply and demand play an integral part in a market economy. The law of supply and demand states that the lower the cost of a good or service, the more consumers will purchase. The higher the cost of the good or service the less consumers will purchase, however the supplier will produce more. There are factors such as laborers, capital, entrepreneurs, physical resources and information resources that can effect demand and supply. Depending on the stability of these resources the economy can experience either surplus or deficit.
Private enterprise is comprised of four key factors; private property rights, freedom of choice, profits and competition. Competition can be separated into 4 categories; perfect competition, monopolistic competition, oligopoly and monopoly. Perfect competition as I have outlined in our threaded discussion is comprised of many buyers and sellers all offering goods or services. Monopolistic competition does not have as many sellers involved and is made up of the sellers getting into a marketing war for essent ...