Example?
• Your brother decides he wants to get into the
hot dog business. He buys a hot dog factory
and hot dog ingredients, and sells them for a
profit. He gets $1.00 per hot dog from
restaurants in Atlanta because very few other
hot dog manufacturers sell their product
there, but he can only get $0.80 per hot dog in
Washington D.C. because there is a very
competitive market for hot dogs in D.C.
Example!
• Your brother decides he wants to get into the
hot dog business. He buys a hot dog factory
and hot dog ingredients, and sells them for a
profit. He gets $1.00 per hot dog from
restaurants in Atlanta because very few other
hot dog manufacturers sell their product
there, but he can only get $0.80 per hot dog in
Washington D.C. because there is a very
competitive market for hot dogs in D.C.
Example?
• In Mao’s China, the government owns all the
businesses, including the rice patty farms
where many Chinese citizens work. The
government decided how much rice these
farms would produce and set the price for rice
to be sold in stores. The workers made the
same amount of money no matter what their
position was or how hard they worked.
Non-example!
• In Mao’s China, the government owns all the
businesses, including the rice patty farms
where many Chinese citizens work. The
government decided how much rice these
farms would produce and set the price for rice
to be sold in stores. The workers made the
same amount of money no matter what their
position was or how hard they worked.