Magnificent Monday, September 24

Transcription

1 Magnificent Monday, September 24 a.

2 Magnificent Monday, September 24

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8 Tubular Tuesday, September 25 a.

9 Today s Presentation

10 Business Organization Consulting 1. As a group, review your graphic organizer and make sure each member understands the structures as well as advantages/disadvantages of each structure. 2. Get a client assigned to your group; read their case and take notes. 3. Discuss strengths and weaknesses of your client and which business organization would be best for your client. 4. Each member of the group must complete the Consultation Planning Sheet.

11 Prepare your presentation: 1. Each person in your group must contribute to the planning and presentation. 2. Each presentation must have the following elements: a. b. c. d. Description of your client and the business they want to start. Include strengths and weaknesses of your client. Recommendation of a particular business organization; include at least two advantages and two disadvantages they will encounter with the recommended structure. Explain why your group chose that structure; this part should discuss specific facts about your client and how those facts led to your recommendation. Predict three questions that your client might have about your recommendation and how you would answer them. 3. Your grade will be based on your planning and presentation. 4. Your group will lose points if anyone in the group is talking or disruptive during someone else s presentation.

12 Wassup Wednesday, September 26

13 Influencing Market Outcomes: Price Ceilings and Price Floors

14 How much is the shortage if the price is $1? Demand P Schedule $5 P Supply Schedule S Qd $5 10 $4 20 P 4 Answer: 70 3 $3 30 $2 50 $1 80 Qs $5 50 $4 40 $ o 1 D Q $2 20 $

15 Supply and Demand are put together to determine equilibrium price and equilibrium quantity P Supply Demand S $5 Schedule Schedule P Qd $5 10 $ $3 30 $2 50 $ o 1 What if the government set a minimum price (price floor) of $4? P $5 50 $4 40 $3 30 D Qs 80 Q $2 20 $

16 A $4 price floor would result in a surplus. The quantity demanded is less than quantity supplied. Demand P Supply Surplus S Schedule $5 Schedule (Qd<Qs) P Qd P Qs Price floor $5 10 $4 20 How much is the $5 50 surplus with a $4 $4 40 price floor? Answer: 20 $ $3 30 $2 50 $ o 1 D Q $2 20 $

17 Influencing Market Outcomes: Price Ceilings and Price Floors Price ceilings and price floors prevent the market (buyers and sellers) from determining prices that allocate goods and resources.

18 Influencing Market Outcomes: Price Floors Price floor is the lowest price set by law that can be paid for a good or service Minimum wage is an example: this is the lowest legal wage that can be paid to most workers

19 Price Floors Advantages: Minimum wage raises poor people s incomes and provides a measure of equity Disadvantages: Employers may hire fewer workers at higher wages, therefore might result in an increase in unemployment

20 How much is the surplus if the price is $5? P Demand $5 Schedule P Qd $5 10 $ $3 30 $2 50 $ o 1 S What if the government Answer: 40 sets a price ceiling (maximum price) of $2? D Q Supply Schedule P Qs $5 50 $4 40 $3 30 $2 20 $

21 With a $2 price ceiling, there is a shortage. The quantity demanded is greater than quantity supplied. P Supply Demand $5 S Schedule Schedule P Qd P Qs 4 How much is the $5 10 $5 50 shortage at $2? 3 Answer: 30 $4 20 $4 40 $3 30 $2 50 $ Price ceiling Shortage (Qd>Qs) 1 o D Q $3 30 $2 20 $

22 Influencing Market Outcomes: Price Ceilings Price ceiling is the maximum price set by law that can be charged for a product or services. Examples: rent control laws in NYC keep some rental rates lower than the market price; $25 max price for car emissions tests in Georgia

23 Influencing Market Outcomes Price ceiling disadvantages: Demand becomes too high. Suppliers face lower profits, therefore some suppliers limit service or leave market altogether. Advantages: Achieve social goals of equity and security Individuals who could not afford the market price now may be eligible

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71 Work Period Create two double-bubble maps: 1. Comparing pure competition with monopolies 2. Comparing monopolistic competition and oligopoly Each map should address the following: Number of sellers Barriers to entry in market Product differentiation Competition or non-price competition? Control over prices Advantages and disadvantages

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73 Current Event Work OR Study Guide Work