Economics Paper

2167 Words9 Pages
Economics Paper
University of Phoenix
ECO365
May 6, 2013

Economics is a tool that we use in our daily lives even if we don’t always realize it. As people we all have things that we want, and things that we need. This includes things like food, clothing, and shelter, but it is not limited to those things. In order to get those things, people have to spend money. The issue is that everything that people need and want costs money. More often than not, people do not have the money to do both so they have to decide which things are important for them to have right now. This does not only apply to families, but businesses as well. This paper will address different types of economics and some of the factors that contribute to its changes.
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Businesses will increase the production of goods and services that cost more money because they will be able to increase their profit margins. In the same way, when prices decrease they will scale back the production of those products because they will not be able to as much of a profit. Companies will always do what is best for them, and the number one reason for them being in business is to make money. What the consumer wants will always dictate they type and price of goods and services that are supplied. When a certain type of product comes out or starts to increase in sales it directly affects the market for that product or service. An example of this is when iPods came out and got very popular. The price of the product was high initially, but they were still selling very well. Apple increased its production because they were able to make greats profits from it. After this happened there was an influx of other mp3 players from a plethora of other electronics companies. Since they had new found competition, Apple was forced to lower the price of the item. Consumers still preferred the iPod over many of the other mp3 players on the market, and because of their presence, the iPod became much more affordable. In economics the law of demand states that “all else equal, as the price of a product increases, a lower

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