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A Discussion of Supply & Demand

Just looking for a paragraph or so for each of the 4 questions below to get a discussion going:

1) Discuss some important aspects of the free enterprise system or capitalism.
2) Why are price and competition so important for the free enterprise economic System?
3) List and describe two or three goods and/or services that you think their prices have been affected by supply and demand in recently.
4) Should there be a minimum wage? Should there be a "living wage"? What are the costs and benefits of a minimum wage or living wage? How does a minimum wage affect the demand for labor? How does it affect the supply of labor? (think about the supply and demand equilibrium model) How will a living wage affect the overall demand in the economy ? (think about the circular flow model) Can you find some sources to support your position?

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I have outlined a response for you. If you have any further questions or need clarification, please ask.

1) Discuss some important aspects of the free enterprise system or capitalism.
The free enterprise system works under the assumption that people will buy what is available, using the elements of price and need. Supply will meet demand and when supply is lower than demand, prices will rise if people are seeking the product or service. If supply exceeds demand, then the prices will be lower. Those that provide the product or service for the best price will obtain the customers who will buy the product. Supply and demand are both based on the customer demand for the product. In a free market system, there are few requirements on business and government or public companies are limited in number.

2) Why are price and competition so important for the free enterprise economic System?
Price is the point where people are willing to purchase a product or service. If the price is too high, fewer people will buy the product. If the price is too lower, many will buy it, but such pricing invites competition who see the number of customer a product has. Companies compete for customers. To do this they must provide a good product at a good price, or the customer will go to another company to buy.

3) List and describe two or three goods and/or services that you think their prices have been affected by supply and demand in recently.
Two years ago, the supply of oranges and other citrus fruit was down due to an unexpected weather ...

Solution Summary

A review of some of the elements of free market systems including pricing, competition, supply and demand, and wages.

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