MGTA01H3 Study Guide - Monopolistic Competition, Monetary Policy, Planned Economy

• School: UTSC
• Department: Management (MGT)
• Course: MGTA01H3
• Professor: mcckoncey

Document Summary

Businesses are organizations that produce or sell goods or services to make a profit. Each business must operate in the context of its economic system. Economic systems differ in terms of who owns or controls the five basic factors of production: labor, capital, entrepreneurs, physical resources, and information resources. In planned economies, the government controls all or most factors. In market economies, individuals and businesses control the factors of production and engage in free exchange. The u. s. is a market economy, based on the principles of capitalism, and propelled by the forces of demand and supply. Demand is the willingness and ability of buyers to purchase a good or service. Supply is the willingness and ability of suppliers to offer goods and services for sale. Market equilibrium is the price at which the quantity demanded and the quantity supplied is equal.