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Economic and management sciences

Grade 7

The successful entrepreneur

Module 9

The price factor

The price of goods/services is determined by the manufacturers (sellers) and consumers (buyers). The price is influenced by the supply (the availability of a product/service) and demand (the number of people who want a product or service and are able to pay for it).

  1. Demand

When clients want a product and are willing to pay for it, we say that there is a demand for the specific product. There has to be a demand for a product before a manufacturer can sell it. Demand does not only have to do with the need to have a product or a service, but also with the willingness and ability to buy it at the price changed for it.

ANDREW’S GRAPE JAM

Andrew and his mother decided to earn extra money by selling grape jam at the local craft market. Mrs Jeffries would buy the ingredients and make the jam. Andrew would help his mother to seal it in jars and they planned to sell it at the market on Saturday mornings.

Before starting to boil the jam, they decided to test the market to see whether people would be interested in buying their product. Mrs Jeffries therefore boiled a few jars of jam and asked their friends and family if they were interested in buying it and how much they would be willing to pay for it. Everyone was encouraged to taste some of the jam before making a decision.

Andrew entered the sales on a table as follows:

Price per jar Number of jars requested (sold)
R6,00 5
R5,00 9
R4,00 16
R3,00 24

He also presented it in a graph to indicate the demand at different prices:

The line on the graph indicates the way in which the change in price brought about a change in demand. It is referred to as the demand curve. It specifies the amount of a product according to the demands for it at a specific price.

Activity 1:

To establish if someone is well-suited to become an entrepreneur

[lo 1.4]

Study Andrew’s graph carefully and answer the following questions:

  • What was the effect of the price of the jam on the demand for the jam?
  • Is this phenomenon true for all products?
  • Are you able to think of any product where price does not affect the demand of the product?

NOBOBY WANTED TO BUY THE JAM AT MORE THAN R6,00 PER JAR.

2. Supply

Sellers provide the market with goods and services. The supply of something has to do with the quantity that is available for sale. The manufacturers or sellers who offer goods want to sell as much of it as possible at the best prices possible. They want to make as much profit as possible.

ANDREW’S GRAPE JAM (continued)

Andrew and his mother calculated that they were not able to make and store more than 100 jars of jam per week.

They would like to sell the jam at R6,00 per jar, but they know that everybody would not be willing to pay R6,00 for it. If they have to make the jam at R3,00 per jar, they are not willing to sell more than 25 jars at that price. They could store the rest and sell it at a better price, later.

Andrew drew up another table to indicate how many jars they were willing to sell at the specific prices:

Price per jar Number of jars that they would sell at the price
R6,00 100
R5,00 75
R4,00 50
R3,00 25

The supply curve would then look like this:

3. Market price

Before goods or services can be bought or sold, both seller and buyer must agree on the price to be paid. Prices normally are determined by the manufacturers or sellers. The consumer can decide whether he or she is willing to buy it at that price, or not. At some markets buyers and sellers negotiate with one another until they reach a point at which both are satisfied with the price.

A combination of the supply and demand curves may illustrate this phenomenon best.

Remember:

  • Sellers want to sell as much as possible at the highest prices.
  • Buyers want to buy as much as possible at the highest prices.

They have to come to an agreement somewhere!

Supply and demand meet at the price where the amount of the demand is equal to the amount supplied.

Activity 2:

To make inferences about the interaction between buyer and seller

[lo 1.3]

  1. Group discussion: Who benefits most when the price is higher than the market price and who benefits most when the price is lower than the market price?
  2. Are you able to think of reasons why a product may cost less/more than the market price?

Assessment

Learning Outcomes(LOs)
LO 1
THE ECONOMIC CYCLEThe learner will be able to demonstrate knowledge and understanding of the economic cycle within the context of ‘the economic problem’.
Assessment Standards(ASs)
We know this when the learner:
1.3 explains the concepts ‘free’ and ‘economic’ (scarce) goods, and the influence of demand and supply on market prices.
1.4 describes and debates the power relationships, economic rights and responsibilities between:
1.4.1 consumer and producer;
1.4.2 employer and employee;
1.4.3 government and business.

Questions & Answers

what is Nano technology ?
Bob Reply
write examples of Nano molecule?
Bob
The nanotechnology is as new science, to scale nanometric
brayan
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Damian
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
Renato
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
?
Kyle
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
Adin
why?
Adin
what school?
Kyle
biomolecules are e building blocks of every organics and inorganic materials.
Joe
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
research.net
kanaga
sciencedirect big data base
Ernesto
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
Bharti
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
Daniel
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
Maciej
characteristics of micro business
Abigail
for teaching engĺish at school how nano technology help us
Anassong
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
NANO
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
s.
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
Tarell
what is the actual application of fullerenes nowadays?
Damian
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
Tarell
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
Virgil
is Bucky paper clear?
CYNTHIA
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
NANO
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Harper
Do you know which machine is used to that process?
s.
how to fabricate graphene ink ?
SUYASH Reply
for screen printed electrodes ?
SUYASH
What is lattice structure?
s. Reply
of graphene you mean?
Ebrahim
or in general
Ebrahim
in general
s.
Graphene has a hexagonal structure
tahir
On having this app for quite a bit time, Haven't realised there's a chat room in it.
Cied
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic and management sciences grade 7. OpenStax CNX. Sep 10, 2009 Download for free at http://cnx.org/content/col11025/1.1
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