Businesses and entrepreneurs are very smart
about doing business. That’s why they are more likely to undertake the project
that consumers value highly relative to price. Firstly, it is because doing
this kind of job will bring marginal benefits exceeding the marginal cost of
building the project. When something is beneficial, people will be more likely
to do it. If the product or the project is highly appreciated, its price tends
to rise and the benefit also increases. For instance, an event organization firm
receives a project to prepare a paying educational event for an inspiring and
famous professor. This event is going to be popular and valued by the people.
Therefore, the organization can earn a lot of money by selling tickets.
when a project or production price is exceed the price of the consumer
willingly to pay, the demand for the project will tend to be decrease because
we focus on price of the thing rather than the value of the thing to the
consumer. As a result, the price will fall and the entrepreneurs or businesses
will get a loss not profit. It is an incentive matter that people would likely
choose it when the thing has benefits for them. As the project doesn’t benefit
to the entrepreneur or businesses, they won’t undertake that project. For
example, there is a government sponsored project for a company to build steel
tube. At the time steel price is too expensive, so they have to charge a high
price that exceeds the price of consumer willingly to pay. So the demand for
steel tube will decrease and the price of steel tends to fall.
As a result, the entrepreneurs or
businesses will get a lost instead of profit.
A consumer decides whether to purchase a good
when the buyer has to determine the value of that product which is worth for
them to buy it or not. They have to think about the quality, brand name and
also the price of the product. It’s related to “The law of demand”: When the
price of the product decrease people will purchase more and the demand will
increase. Product placement is also one of the reasons for consumers to
purchase more. For instance when a man
wants to buy the lap she has to consider about the brand name which is trend
for today and quality of the product .Location is also play as an important
role for buyer. If the shop is in other country it will make him less likely to
purchase it. He can buy the other laptop which has in the country. Furthermore,
a consumer decides whether to purchase a good throughout the “Decision
Making Process”. First the consumer recognizes his/her needs. Then they
start to search for information. Next they evaluate the alternatives (which
brand he/she wants). After making the evaluation he/she purchase the good.
After all the consumer will make a post-buy evaluation to see whether that brand
satisfies his/her needs or not. For instance, you think that u need a pair of
shoes for sporty activities so you go online or shop visiting to search for
shoes that is comfortable for you. After collecting all the information, you
choose which brand stratified your need (Nike, Adidas or Puma) and buy it.
decides to purchase a good it shows that consumer see the value or uses in that
good, meaning it’s worth the money they spent. For example, when a man buys a
laundry machine, it shows that he knows the advantages of that machine which
can make his life more comfortable and easier. He doesn’t have to laundry by
his hands and spend few hours to finish it. He just throws the cloths to the
machine and turn on. So he can do the other thing also. It’s save lots of
entrepreneur decides whether to supply a good if the entrepreneur observes that
if value can be created or make when sold or supply the good to the public.
It’s related to “The law of supply”: when the price of good rises, entrepreneur
or supplier will supply the good more. When technology improves, supply also
increases. For example: In Cambodia in the past in farming sector, we use
cattle to plow and we do everything by hand. The supply of the rice is limit.
But nowadays when technology improved everything for farming is by machines, so
the supplier will supply more.
Entrepreneurs will not continue to supply a good or service
if consumers are unwilling to pay a price sufficient the cover per-unit cost.
If the entrepreneurs sell the good or service at a price under per-unit cost
then the film will encounter a great loss and not receive any profit
(lost money). No one will be trade if we
don’t get enough profit or income.
people buy shoes. There are many reasons why people choose to buy new pairs of
shoes. First, people buy a new pair of shoes because it costs in a reasonable
price compare to its benefits. In our modern day shoes are cheap to produce.
Thus it is also affordable to buy. Even though it is inexpensive, it provides
us with many compulsory advantages. For instance, we can walk or travel
anywhere on foot using shoes. Shoes also protect our leg from the hard ground
that can hurt our leg, making us comfortable. In addition, shoe is a fashionable
wear that makes us look exclusive with its brand and design. It is also
function similarly to jewelry.
new pair of shoes doesn’t hurt anyone. However, it benefits you, the
manufacturers (designers, workers) and the middlemen. It creates jobs,
circulate money and improves the economy, because trade is a win-win activity.