Products, Services, and Prices in the Free Market Economy

Essay by chispita4342University, Master's July 2007

download word file, 5 pages 3.3

A firm's success in a market economy depends on meeting customer needs by producing the products they want and selling goods and services at prices that meet the competition they face from other businesses. The issue to be addressed is best utilizing producer's inputs to the greatest output value.

The first decision to be made in this instance is to decide what the possible size and type of consumer demands. It must be understood that a company that has the right plan in mind will always strive to undersell their competition in the marketplace and still make a profit. The prices the company has to pay for its inputs will obviously play a major role in determining how much the company will use. Example: A company should have a strong incentive to look for ways to use more machinery, or capital, and less labor. Any competitive business carries a large element of risk: a new product may fail to attract customers, or maybe manufacturing costs may be higher than expected.

The end result is that companies always bear this risk of failure, however if they make appropriate plans, they stand to reap great economic rewards. The balance of risk and reward results in playing a key role in building a strong economy.

If business plans are well in place, not only does the company succeed at building a stronger economy, but customers also benefit from the competition that is in place because they get better products at lower prices.

Apollo Group, through its subsidiaries, the University of Phoenix, the Institute for Professional Developments, the College for Financial Planning Institutes Corporation, and Western International University, provides higher education to working adults. The group primarily operates in the US. It is headquartered in Phoenix, Arizona.

The Institute for Professional Development...