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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

where we get a research paper on Nano chemistry....?
Maira Reply
what are the products of Nano chemistry?
Maira Reply
There are lots of products of nano chemistry... Like nano coatings.....carbon fiber.. And lots of others..
learn
Even nanotechnology is pretty much all about chemistry... Its the chemistry on quantum or atomic level
learn
Google
da
no nanotechnology is also a part of physics and maths it requires angle formulas and some pressure regarding concepts
Bhagvanji
Preparation and Applications of Nanomaterial for Drug Delivery
Hafiz Reply
revolt
da
Application of nanotechnology in medicine
what is variations in raman spectra for nanomaterials
Jyoti Reply
I only see partial conversation and what's the question here!
Crow Reply
what about nanotechnology for water purification
RAW Reply
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
Damian
yes that's correct
Professor
I think
Professor
Nasa has use it in the 60's, copper as water purification in the moon travel.
Alexandre
nanocopper obvius
Alexandre
what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
Rafiq
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
Damian
How we are making nano material?
LITNING Reply
what is a peer
LITNING Reply
What is meant by 'nano scale'?
LITNING Reply
What is STMs full form?
LITNING
scanning tunneling microscope
Sahil
how nano science is used for hydrophobicity
Santosh
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
Rafiq
what is differents between GO and RGO?
Mahi
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
Rafiq
if virus is killing to make ARTIFICIAL DNA OF GRAPHENE FOR KILLED THE VIRUS .THIS IS OUR ASSUMPTION
Anam
analytical skills graphene is prepared to kill any type viruses .
Anam
Any one who tell me about Preparation and application of Nanomaterial for drug Delivery
Hafiz
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
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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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