Entrepreneurship and Small Business Management

Section 1: Entrepreneurship and the Economy

Section 1.1 Summary
To be able to compete and succeed in the free market system, entrepreneurs need to understand how the economy works. There are several types of economic systems. Most democratic nations have a free enterprise system. Fundamental to the free enterprise system is the right of economic choice. Factors of production are the resources businesses use to produce the goods and services people want. Supply and demand interact to determine the price customers are willing to pay for the number of products producers are willing to make. The federal government publishes statistics called economic indicators that help entrepreneurs understand the economy and predict possible changes. A business cycle is the pattern of contraction and expansion that the economy goes through. Entrepreneurs contribute to society in many ways.

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