Marketing Dynamics-Chapter 3 Study Guide THE FREE ENTERPRISE SYSTEM Profit As _______ increases, risks increase Competition the struggle between companies for customers Consumers person who uses the product. Consumers decide whether or not a business will survive. Federal Reserve Board has the power to control the U. S. monetary supply. Federal Trade Commission investigates deceptive and misleading business practices, like false advertising. Four roles that our government plays in our free enterprise and an example of each. PROVIDER OF GENERAL SERVICES Public Libraries, Supporter Of Businesses -runs Small Business Administration & establishes trade alliances and agreements with other countries, REGULATOR-FDA,EEOC,OSHA, CPSCConsumer Product Safety Commission and COMPETITOR-TVA, U. S. Postal Service competes with DHL, UPS and Federal Express, Amtrak. Free enterprise system encourages individuals to start and operate their own businesses without government involvement. Function of licensing agreement protects businesses and individuals from unauthorized copying Math skills- how to figure profit Sales-2,456,700 Costs-1,246,100 +Expenses-1,112,332 98,268 Subtract Costs & expenses from Sales Math skills-how to figure loss B –Revenues 2,000,00Expenses 2,025,000 Business Loss of 25, 000 Subtract expenses from revenue Name the regulatory agencies that have been set up by the government Food and Drug Administration Equal Employment Opportunity Commission Occupational Safety and Health Administration Name three major businesses that make our government a competitor in the market place Tennessee Valley Authority, Amtrak and U. S. Postal Service Non price competition when businesses choose to compete on the basis of factors not related to price OSHA Occupational Safety and Health Administration is a governmental regulatory agency created to protect employees. Price competition focuses on the sale price of a product. Price competition example Price Match at WalMart with any grocery store Profit the money earned from conducting business after all costs and expenses have been paid. Risk the potential for loss or failure in relation to the potential for improved earnings. Securities and Exchange Commission responsible for regulating the sale of stocks and bonds. Sherman Antitrust Act was created to prevent monopolies. Shortages occur when demand exceeds supply Surpluses occurs when the supply of goods exceeds demand The government is the single largest U. S. consumer of goods and services.