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Intro to Marketing Chapter 3

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private enterprise
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based on independent decisions by businesses and consumers with only a limited government role regulating those relationships
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five variables in demand
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tastes and preferences incomes price of related goods (substitutes, complementary goods) future expectations number of consumers
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controlled economy
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government owns resources
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free economy
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resources owned by individuals, no government regulation or control
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mixed economy
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goods and services are provided by the government and some private enterprise
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better marketing
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knowledge of economics types of competition interpreting marketing information
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scarcity
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result of unlimited wants and limited resources; impacts resources and production; may determine type of economic system
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consumers
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individuals who purchase products and services to satisfy their needs
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demand
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the relationship between the quantity of a product consumers are willing and able to purchase and the price
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producers
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businesses that use their resources to develop products and services
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supply
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the relationship between the price and quantity of a product that producers are willing and able to provide
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supply factors
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technology input prices prices of goods related to production future expectations number of producers
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macroeconomis
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studies the economic behavior and relationships of an entire society; looks at the big picture and studies the decisions of all consumers and producers and their effects of decisions on the economy
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microeconomics
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examines relationships between individual consumers and products; looks at small parts of the total economy; studies how individuals make decisions about what to produce and what to consume
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demand curve
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the relationship between price and the quantity demanded
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law of demand
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when the price of a product is increased, less will be demanded; when the price is decreased, more will be demanded
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factors of demand
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need or want available supply availability of alternative products that consumers believe will satisfy their needs
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factors of supply
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possibility of profit amount of competition capability of developing and marketing the products or services
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economic resources
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natural resources, capital, equipment, labor; specific type of resources a business has will determine the types of products they will produce
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supply curve
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the relationship between price and quantity
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law of supply
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when the price of a product is increased more will be produced; when the price is decreased, less will be produced
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market price
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point at which the supply and demand curves intersect; used to determine how much of a product will actually be produced and sold
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economic utility
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amount of satisfaction a consumer receives from the consumption of a particular produce or service (high satisfaction = high economic utility)
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form utility
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physical product or service offered; more usable, better constructed or with more features (car’s cupholders, seats, etc.)
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time utility
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availability of a product or service (late hours, easy access, quick delivery)
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place utility
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making the products or services available where the consumer wants them (hotels and gas stations near highways, etc.)
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possession utility
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occurs due to lack of resources; affordability of the product or service; producers cannot cut prices, so they finance, lease, or rent products (tuxedo rental)