Why are the demand and supply concepts so important to the understanding of economics?
Both concepts are important in everyday life. For a consumer, the lower a price for a good he/she will purchase more of that good. If the price begins to rise the consumer will consider purchasing less of that good. In general terms that is why a demand curve is downward sloping. For the supplier of the good the producer will supply more of a good if the price of their good is rising. And conversely, if the price of their good starts to fall the producer will consider producing less of that product. In general terms, that is why the supply curve is upward sloping. The market will establish an equilibrium price where the quantity demanded by the consumer is equal to quantity supplied by the supplier. In theory, at this price both the consumer and the producer are equally satisfied. This is an utopian situation. As you study more in economics you will learn that other environmental factors will affect this relationship.
Why is a business plan important to an entrepreneur?
The first important aspect to a business plan is that it will help the entrepreneur create a blue print for the future of his/her firm. The entrepreneur will have to complete the different sections of the business plan, and by doing so, the entrepreneur is able to use strategy to make his/her business successful. A second important aspect is that it will help the entrepreneur to do research and help him/her create the necessary 4 Ps for any successful business. A third important aspect is that a successful plan will help the entrepreneur secure funding for the operation of the business. Also, the business plan can be used as a promotional tool to secure suppliers or even to impress their intended customers. Finally, the plan will help the entrepreneur create a brand. By creating a strong brand this will improve the entrepreneur's self-image and become a focal point for other stakeholders involved with the business.
Why is Business Strategy important to managers?
Business Strategy is important to managers because it provides direction for the organization as a whole. It will help the organization clarify its mission and vision. Instead of reacting to their environment the organization can by using Strategic Management Principles use proactive measures developed by establishing contingency plans to overcome any environmental maladies that may occur. Another aspect to using Business Strategy is that through the tools that can be used the members can work as a team thereby creating synergy.