Supply and Demand

  • Demand: Amount of product consumers are willing to buy at various prices; higher demand at lower prices.
  • Supply: Amount of product producers are willing to offer at various prices; higher supply at higher prices.
  • Market Price: Achieved when supply equals demand; influenced by the relationship between the two.
  • Factors Influencing Demand: Necessity goods maintain steady demand, advertising can shift demand for products.

The Role of Business

  • Entrepreneurs: Individuals who start businesses; essential for economic function; bear risks and receive rewards.
  • Factors of Production: Entrepreneurs provide/hire land, labor, and capital to establish businesses.

Business Ownership Types

  • Sole Proprietorship: Owned by one individual; ~70% of U.S. businesses; full control but bears all risks.
  • Partnership: Owned by 2+ people; shared risk/reward; issues may arise from differences in opinion.
  • Corporation: Legally separate entity; ownership through shares; lower personal risk but complex to establish.

The Rise of Big Business

  • Large corporations dominate 90% of sales; emerged from the 1800s industrialization.
  • Corporations can produce more efficiently due to resources for machinery and research.

Growth of Wage Labor

  • Labor is a significant factor; conflict arises between worker wages and business profits.
  • Transition from agriculture to industrialization led to low-skill labor demands.
  • Workers exchanged labor for wages under often difficult conditions.

Rise of Labor Unions

  • Workers organized into unions to improve wages and conditions; collective bargaining is a key tactic.
  • Unions employ slowdowns, boycotts, and strikes to pressure employers for improvements.

Businesses Respond to Unions

  • Companies may employ strikebreakers and use tactics such as lockouts and blacklists against unions.
  • Employers may also require anti-union contracts to undermine union solidarity.

Results of Unions

  • Unions lead to wage increases and shorter workdays; boosted federal protection for workers' rights.
  • Despite successes, unions faced defeats, with ongoing struggles for influence.

Unions Today

  • Union membership has declined; modern recognized shared interests in safety and fair pay.
  • Unions acknowledge that business profitability impacts worker security; balance between wages and operational viability.

Modern U.S. Economy

  • Farming constitutes less than 3% of the labor force; service industries have become dominant employment sectors.