Free Enterprise 3rd grade Katonya Beaubouef – Herod Elementary Free enterprise • The freedom to start a business and sell, for profit, any product or service allowed by law. Consumer • A person who buys a product or service. demand • The desire or need for a product or service. When will the demand for a product be small? High? supply • The amount of goods offered for sale by a business. Explain the difference between supply and demand. How Supply and Demand Work SUPPLY DEMAND PRICE High High Low High Low Very low Low High Very high Low Low High scarcity • A shortage, or lack of supply of a product What are some causes of scarcity? specialize • To do just one kind of work or sell just one kind of product. overhead • The amount of money it takes to run a business. overhead Heating/ cooling workers electricity wage • The money a worker is paid. profit • The amount of money left over after all the costs of running a business have been paid. When does a business make a profit? When do they do not? marketing • The job of getting costumers to want a product. McD sponsor coupons advertise competition • The efforts of two businesses with the same products to get consumers to buy from them. What are some things that business do to compete?