Download The Economics of Supply and Demand 9.1 Supply and Demand

The Economics of Supply and Demand
9.1 Supply and Demand
Goals
 Explain the _______________ between supply, demand, and price.
 Discuss the government’s _______________ on pricing.
Terms
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law of demand
law of supply
scarcity
equilibrium
price fixing
bait and switch
price discrimination
THE LAWS OF SUPPLY AND DEMAND
 demand
 the _______________________ between the quantity of a product that
consumers are willing and able to purchase and the price
 businesses that use resources to _________________ products and services
 producers
 businesses that use resources to ____________ products and services
 supply
 the ____________________ between the quantity of a product that producers
are willing and able to provide and the price
Price-Demand Relationships
 law of demand
 an inverse _____________________
 when the price goes _______, demand goes __________
 when the price goes down, demand goes up
Price-Supply Relationships
 law of supply
 when the price goes _________ the supply produced goes _______
 when the price goes down the supply produced goes down
 Scarcity
 scarcity
 consumers have ___________ money to spend
 producers have ____________ resources to use for production
 Consumers and producers must decide how to use their ___________ resources to
meet unlimited wants and needs.
Equilibrium
 equilibrium
 the point where the supply and demand curves ______________
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 __________ the best quantity and price for goods and services
Concerts in the Spotlight
 Concert prices can be set ___________.
 ____________ supply
 high demand
 If demand is high ___________, supply can be increased by adding a second show.
How does price affect demand?
GOVERNMENT INFLUENCE ON PRICING
 private-enterprise system
 based upon ________________ decisions made by consumers and businesses
 The U.S. government has an influence on prices charged for merchandise directly and
indirectly through ____________ laws, taxation, and various consumer protection laws.
Benefits of Competition
 monopoly
 where one business ______________ the entire market
 ____________ laws encourage competition and help avoid monopolies.
Taxation
 Taxation can be used by the government to ______________ or discourage sales.
Illegal Pricing
 price fixing
 when related businesses _______________ to charge high prices
 ______________ in U.S.
 bait and switch
 when a product that is ____________ at a great price is “out of stock”
 salesperson tries to sell customer a ____________-priced alternative
 advertised prices __________ be misleading
 price discrimination
 occurs when one individual, group, or business is __________ a higher price than
others ______________ the same product or service
 List three ways the government influences pricing.
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Lesson 9.2 Pricing Strategies
Goals
 Discuss pricing ___________ used by businesses to increase sales.
 List five steps for _______________ price.
Terms
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operating expenses
markup
price lines
loss-leader pricing
PRICING CONSIDERATIONS
 price
 the amount that ____________ pay for products and services
 Pricing
 the process of establishing and ________________ the value of goods and
services to customers
 operating expenses
 all the costs associated with ________________ your business
 markup
 the amount that is ____________ to the cost of an item to cover operating
_________________ and allow for a profit
 Pure Competition
 many companies offering the __________ product
 customers do not recognize major differences in the brands
 the market will _________ the prices low as businesses compete for consumers’
business
 market price
 determined by _________ of supply and demand
 if not _____________ to cover costs and allow for a profit, the business will
cease production of the product
Pricing Policies
 one-price policy
 all customers pay the __________ price for a product
 flexible pricing policy
 allows customers to ___________ a price within a range
 Price Lines
 distinct categories of merchandise based upon _________, quality, and features
 geographic pricing
 allows pricing variations based upon __________________ location
A Variety of Pricing Strategies
 Psychological Pricing
 creating an ________________ for customers
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 Prestige Pricing
 higher-than-_____________ pricing
 targets customers seeking _____________ and quality
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 Volume Pricing
 when a supplier provides a __________ price to a customer who buys a high
volume of product
Promotional Pricing
 offering customers an ____________ to get them in the store
 two-hour/ 50% off sale
Loss-Leader Pricing
 the willingness to take a _______ on the reduced prices of selected items in
order to create more customer traffic
special event promotion
 associates a special ____________ with a major event
Rebates
 ___________ on products that customers can mail in for a refund
 depends upon further action by the customer
multiple-unit pricing
 a ____________ based discount
trade-in allowance
 giving a store your ___________ product when purchasing a new product
 usually results in a _____________ on the new product purchase
List and describe five pricing strategies to increase sales.
 DETERMINING THE PRICE
 There are five steps to determining the price to charge for a product or service.
1. ______________ the price objectives
2. Determine the cost of the product or service.
3. ______________ consumer demand for your product or service.
4. Study the competition.
5. ______________ on a pricing strategy.
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Lesson 9.3 Market Conditions
Goals
 Define the business _________ and describe its impact on sports and entertainment.
 Discuss the _____________ of monitoring consumer trends.
Terms
 business cycle
 inflation
 shoulder periods
IMPACT OF THE BUSINESS CYCLE
 business cycle (economic cycle)
 the ups and downs of the ______________
Expansion
 expansion
 the ____________ of a business cycle
 peak
 ___________ point of growth in the economy
Contraction
 contraction
 the ____________ of a business cycle
 __________________ or depression
 inflation
 when prices for goods and services ___________ faster than consumer income
Business Reaction
 trough
 ______________ point of contraction
 recovery
 economy shows signs of ________________
 prosperity
 the period of business __________________ following recovery
Seasonal Cycles
 For some businesses, demand ______________ with the seasons.
 high season
 the season with the ___________ demand
 low season
 the season with the _____________ demand
 shoulder periods
 periods of ______________ demand
 Sports and entertainment marketing strategies must be _____________ to help even
out the fluctuations created by changing seasonal demands.
What is inflation and how does it contribute to recession?
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IMPACT OF CONSUMER TRENDS
 Trends are dictated by
 ____________ revenue
 sponsors
 ___________ demand
Retro Television
 __________ show fans like to relive the good old days and recall positive memories of
growing up watching the stars in the sitcoms.
 Popular show __________ are inexpensive to show on television.
Game Shows
 There are game show channels that ____________ old favorites.
 New game shows are being produced to meet _______________.
Audience Ratings Speak
 Television ____________ cannot afford the risk of having viewers switch channels to
watch a more exciting show on a competing network.
 Some series do not last more than __________ airings due to flat ratings.
Socio-Culture Issues
 Socio-culture issues include trends in
 customer _________
 lifestyles
 _____________
 demographics
 Assessing consumers’ ever-changing needs and wants is the ______________ line for
the ______________ or failure of a product or service.
Why must sports and entertainment marketers pay careful attention to consumer trends?
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