Essay on Economics and Free Market Economy

688 Words Oct 15th, 2013 3 Pages
VIDEO CASE

1 . Is Peet’s market monopolistic or an oligopoly?
An oligopoly

2. What are some ways that Peet’s Coffee & Tea tries to differentiate its product offering?
Offering free samples and educating their customers about their products. The Peetniks Program.

3. What consumer needs is Peet’s satisfying?
The need to feel a part of special group. The need to feel like an informed consumer.

KEY TERMS

free enterprise - an economic system with few restrictions on business ownership and activities

cultural (or workplace) diversity - a belief that cultural identities should be maintained and valued

business - an organization which sells goods and/or services to consumers

profit - the amount of revenue gained
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government to control the economy by changing interest rates and required bank reserves

fiscal policy - the use of the government budget (taxation and spending) to influence the economy

federal deficit - when the government spends more than it makes

national debt - debt owed by the federal government

competition - trying to gain business by offering the most favorable terms

perfect (or pure) competition - markets where no company is large enough to have the power to have a large market share

supply - total amount of a product available to consumers

demand - consumer’s desire and willingness to pay for a certain product

market price - the price goods or service are offered in the marketplace

monopolistic competition - a market structure where companies have many competitors selling slightly different products.

product differentiation - distinguishing a product as more attractive by highlighting

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