1. In the free enterprise system, the profit motive is basically a "decrease for increase", which means that the suppliers have to decrease their prices to increase their consumers because of their competitor's prices. Their impact makes the businesses income basically be on a roller coaster.
2. The price factor is based on whether the industry is mature, whereas the focus is is on lowering prices. An established firm can lower prices because it benefits from lower costs and more experience. The nonprice factor is for the younger  industries where price is not a strong factor. Other factors such as quality, service, and reputation, are more important.
3. Wants are things that you can do without on the daily basis. For example, a young girl may go shopping and see a top that they like, their first quote would be, "I need this top", whereas they already have many tops in their closet and they just want it because they like what they see. Needs are things that you cannot do with out, such as air, water, food, a place to sleep. The basic essentials in life.
4. The relationship between cost and profit is the fact of how much you pay for the product determines how much you retail the product for. The relationship between supply and demand is that the company must supply depending on how much the demand is.

the role profit motive and competition plays in the free enterprises system is for incentive and a way to measure success in a free enterprise systems. competition provides choice, and force companies to improve quality and become more efficient.


price competition is where a company tries to distinguish its product or services from competing products on the basis of low price.

Non price competition is a market strategy which one firm tries to distinguish its product or service from competing  products on the basis of attributes and workmanship.


Needs is something you must have to survive and wants is something you would like to have.

The relationship between cost and profit is the calculation of the of the overall valve of a business venture.



Supply depends upon the demand of a commodity and demand refers to the quantity of a commodity which a consumer is willing to buy at given price.

Entrepreneurship and the Economy

1. A profit motive plays the role of making a profit for a free enterprise system business. Competition plays a role of competing with other business that sells and distributes the same products. The impact of a profit motive helps the company to grow and expand from the profits that they make after paying expenses. The impact of competition is that it forces you to improve in quality of your products that you sell and distribute.

2. Alot of businesses compete with each other with price and non price factors. In a electronic industry, prices is a major factor. The prices always fluctuate on electronics because companies try to be the most reasonable one when it comes to there competition. Prices and non price factors helps businesses to get products at a lower rate.

3. A need is something that people need to maintain a particular lifestyle and a want is something that you do not need but will love to have as your own.

4. After reading the passage I have learned that supply and demand and cost and profit has there similarities. Supply and demand deals with the amount of valuables being sold to consumers which also deals with cost of the valuables for consumers to see if its possible for them to make a profit from it.

Section 1.1 Key Concept Review and Critical Thinking

1. The role of profit motive in the free enterprise system is to act as a way of measuring success. The more money one makes, the more successful the business is. The impact of the profit motive is that it encourages business owners to find ways to cut costs so as to maximize their profit. The role of competition in the free enterprise system is to lower the price of competing goods. With many competing goods on the market, the one thing that will distinguish them (since qualitatively they are similar) is the price. Savvy consumers will seek out the lowest price, and, given the competition between goods which are similar, the product with the lowest price will be bought ahead of the more expensive prices. Thus, the impact of competition is that businesses will seek to keep their prices low to attract consumers.
2. Price competition exists between competing businesses. Often they are able to lower price due to lower costs and a more experienced workforce. Additionally, producing in higher volumes will lower the cost as well. Thus the impact is that price competition encourages businesses to find ways to cut costs so as to lower the price of the product. Nonprice competition also exists between competing businesses. These factors include quality, service and reputation. Thus, nonprice competition impacts businesses by leading them to improve on quality, service, and reputation.
3. The difference between wants and needs is that needs are things one needs to survive, such as food and shelter. Wants are simply things desired by a consumer, but are not necessary for their survival.
4. The relationship between cost and profit and supply and demand is that supply and demand determine the cost of the product. When demand is high and supply is low, the price will go up. When supply is high and demand is low, the price will go down. Thus, the cost and consequent profit gained is determined by the supply and demand of the product.

Question 1

The profit motive encourages the production of quality products that truly meet the needs of consumers. This is the the money that is left after all expense have been deducted from the income. The competition it is good for consumers because it provide choices.it forces companies to improve quality and becomes more efficient, and it leads to a surplus,which brings prices down
Question 2

Business compete on the basic of price and non price factors. in a mature industry as electronic, prices is a factor and the focus is on lowering prices. Prices and non price factors as a major influence on business. This helps the business to get items at a lower rate.

Question 3

A need is a basic requirement for survival that people want. A want is something that you do not have to have for survival, but would like to have


Question 4

The relationship between supply and demand and cost and profit. From reading the passage i have notice that supply and demand and cost and profit has a lot to do with each other. supply and demand as a lot  to do with the amount and how much of the product is being sell to the costumer. It also deals with the cost of the product and for the costumer to see if they can make a profit out of the deal.

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1. In todays society, Profit and Competition play and essential role in the free enterprise system because lucrative businesses  benefit from low prices that they offer to consumers, however consumers prefer a better buy as a result business that   offer reasonable price  gets the upper hand. On the other hand this will force businesses competitors to bring prices down and bring relief to consumers because they have the freedom of choice.
2. Price can be described as how large companies or firms lower their to increase sales, and non-price competition is how small business or firms don't rely on prices but practice consumerism to keep up with competition in the business market
3. A need is a necessity for survival such as food or shelter in addition a want is something that you already have and don't really need for survival.

Number 4

The relationship between cost, price, demand and supply is that: demand and supply determine how a product is priced. Supply and demand determine the price customers are willing to pay for the number of products producers are willing to make. If something is in heavy demand but short supply prices goes up. But, if products are heavy in supply but in short demand prices goes down. If a product is sold at a higher price there will be a lower demand.