entrep 3

• Demand the ability of a consumer to buy goods and services in the market.
• Demand is a consumer's desire and willingness to buy a product at a given price
• Supply - defined as the quantity of goods or services that suppliers are willing and able to provide to customers
• Profits and the Law of Supply To understand pricing, you must look at both demand and supply.
• Profits and the Law of Supply The law of supply states that as the price of a good rises, the quantity supplied also rises. As the price falls, the quantity supplied also falls.
• GNP( Gross National Product) – is a universally used measure of the value of the goods and services produced in the country.
• Consumption – the use of good and service by households.Consumption is the end point of production process. The quality and quantity of consumption has impact on the standard of living of people n a society.
• Investment -is an activity that would most likely result to future growth. An asset or item acquired with the goal of generating income or appreciation over time
• Government purchase – is the total government spending on goods and services. Ex. National defense, medicare, security. Other expenses
• Net Export- defined as the export of goods and services minus the imports of such
• Export - refers to selling goods and services produced on one country to another.
• Imports - refers to bringing goods and services from another country into one's country.
• 1. Price An increase in prices reduces customers wants and needs for a product.
• Preference - If the product does not interest the consumer, they will not pay for it.
• Substitutes Cheaper alternatives
• income, Expectations - satisfaction
• Price elasticity refers to the extent to which changes in price affect the demand for the product
• • Income elasticity measure of how responsive the quantity demanded for a good or services is to a change in income.An increase in income would mean an ease in demand while decrease in income Id mean a decrease in demand.