jobs and or wealth to keep economies growing fast enough The global trend is a blend of free-market economy (capitalism)and planned economy （(socialism）. 3.Economic forces affecting busines Two forces dominate the operation of any free market. Competition Supply and demand 4.Competition Perfect /pure competition:equal size,same product.freely.well-informed Imperfect competition: Oligopoly-some industries are in the hands of a Monopoly-only one firm is in the industry (funeral.water.gas) Functions of competition Price-keep dowr efficiency-improve.reduce costs quality-promote innovation-encourage 5.Supply and demand Supply:something provided by producers Demand:something demanded by customers Theory of supply and demand Role of Government in Business 1.Enforcing laws and regulations. 2.Fostering competition 3.Contributing to social and economic stability. Inflation:steady rise in the prices of goods and services Disinflation:steady decline in the prices of goods and services. CPI:consumer price index Spending for public good Home Assignments: 5 5 jobs and or wealth to keep economies growing fast enough. (solution: privatization) The global trend is a blend of free-market economy (capitalism) and planned economy (socialism). 3.Economic forces affecting business Two forces dominate the operation of any free market. Competition / Supply and demand 4. Competition Perfect /pure competition: equal size, same product, freely, well-informed Imperfect competition: Oligopoly- some industries are in the hands of a few sellers (car, plane, beer) Monopoly-only one firm is in the industry (funeral, water, gas) Functions of competition: Price-keep down efficiency-improve, reduce costs quality-promote innovation-encourage 5.Supply and demand Supply: something provided by producers Demand: something demanded by customers Theory of supply and demand Role of Government in Business 1. Enforcing laws and regulations. 2. Fostering competition. 3. Contributing to social and economic stability. Inflation: steady rise in the prices of goods and services. Disinflation: steady decline in the prices of goods and services. CPI: consumer price index Spending for public good. Home Assignments: