Related Factors I

market?forecast

A market forecast predicts how well a good or service will sell.

Sellers use market forecasts to help determine how much supply to create.

If a forecast is accurate, it will prevent a seller from having a surplus or shortage of goods or services.

opportunity cost

Opportunity cost is what you must give up in order to do something.

If someone decides to quit their job and go to business school, the opportunity cost would be losing their income.

Companies should consider the opportunity cost before they decide what to produce or sell.

resource costs

Resource costs reflect what is needed to develop a good or service.

They may include the cost of materials, technology, and labor.

When resource costs go up, goods and services become more expensive to produce, and the supply is likely to go down.

Questions

What does a market forecast allow business to do?

> understand the market better.

If an electronics company chooses to build more smartphones, the opportunity cost is

> the other devices that could be?manufactured?instead.

What happens when resources costs go up?

>a product becomes more expensive to produce.

If a market forecast predicts increased demand for yellow sweaters in the fall, a clothing company will likely produce more yellow sweaters.

The company used market forecast to anticipate demand for its products.

When expanding into new product categories, a company should consider their opportunity cost.

Companies should consider the opportunity cost before they decide what to produce or sell.

government?intervention

Government intervention is an action taken by the government that influences the supply or demand of goods and services.

A government could set prices for crops, define manufacturing standards, and adjust taxes.

For example, a government may raise taxes on?raw materials?from overseas to encourage companies to buy from?domestic?suppliers.

technology

Advances in technology can improve the speed and efficiency of producing goods and services.

By reducing the time and resources needed for production, the supply of a good or service can be increased.

Questions

Government intervention is when a government interferes with...

.>the supply or demand f goods or services.

How can technology increase the supply of goods for services?

>it decreases the cost needed to make them.

Why made the supply of a product decrease and resource cost increase?

> the product becomes more expensive to produce

A government may raise taxes on?raw materials?from overseas to encourage companies to buy from?domestic?suppliers.

If a market forecast predicts increased demand for yellow sweaters in the fall, a clothing company will likely produce more yellow sweaters.

The company used market forecast to anticipate demand for its products.

When expanding into new product categories, a company should consider their opportunity cost.

A?subsidy?is a form of government intervention where money is given to a producer to keep the price of a product low.

A government may?intervene?to keep industries competitive or?stimulate?economic growth.

The factory invested in automated technology to increase the speed of production.

When manufacturing technology is improved, goods can be produced faster, which will increase their supply.