Nick De Los Santos
CWID: A20317844
Professor Trost
EEE- 2083-30940
February 16, 2023
Module 03 Essay
Throughout the chapters that we were required to read, Bylund reviews the ideas of multiple aspects of society. He explains the overview of the economy, medium of exchange, production, equilibrium, disequilibrium, and how entrepreneurship ties into everything that makes the world go round. The book goes into these topics, breaks them down, and shows scenarios of how each takes on its role within the economy.
The How of the Market
The book's first chapter goes in-depth on the question "Does the market work?" and gives a firm understanding that the answer will be different most of the time. This is because everyone will answer according to what is beneficial to them at that point in time. If they are losing money or not benefiting from provenant businesses, why should they say the market is doing well? It is simple; they won't. In reality, it must be working, or else such a thing would not exist. Understanding the market means knowing that it runs essentially off us as a society. When we exchange goods with one another to gain what we want, that is how the market flows. There are often when we have voluntary exchanges, where both parties have something they both are eager to have and value highly. If we did not have the desire to exchange goods or desire to obtain a particular something, there would be no flow in the market, making it non-existent.
Capitalism– such that capitalist competition will "inevitably" lead to crisis.
Capitalism is defined as "an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state." As Bylund stated in the book, capitalists can affect the market when one starts to overpower another by dominating the market. This is where the formation of monopolies comes into play, where they single-handedly defeat all market competition, causing it not to operate correctly. An example of a monopoly would be John D. Rockefeller (America's first billionaire), who owned up to ninety percent of the oil industry in the 1800s.
Moving forward, we reviewed that the market is built around society, but what exactly does that mean? From the entrepreneur's standpoint, the entrepreneur bases their business and ideas around the future rather than the now. The reason is that consumers desire products in the "now." So it is explained that if an entrepreneur were to make or discover an idea for a product now, they have to think and find ways to keep or make it relevant for the future. "Entrepreneurs choose the type of production that they judge has the greatest chance to meet the approval of consumers at the time it is finalized, and they, therefore, reap the reward of success (earn a profit) and take full responsibility if it fails ( suffer a loss of invested means)" ( Bylund, pg.6).
The other thing I would like to touch on is the idea of opportunity cost. Opportunity cost is the method where you lose out on one thing when you make the decision to go with an alternative choice. No day goes by where opportunity cost isn't in the works; it lives within our everyday lives. In this case, the opportunity cost an entrepreneur may encounter is the loss of money if they invest in materials for their product that may not be desirable in the near future. The key to success is producing a product that meets the consumer's valuable meter to engage in exchange for the product.
The Price Is Right
The answer is that there is no such thing as a "right" price. We could also say, which is equally accurate, that all prices are right. The reason for this is that goods and services offered for sale in the market do not have a single price, but many. This is easy to understand if we return to the discussion in chapter 1, where individuals exchange goods.
One thing to understand and know is that there is rarely a set and stone price within the market. Products within the market gain and lose value daily, and a few different things can cause this. Inflation, competition and temporary scales are all factors in why goods in the market fluctuate their prices.
Inflation: The general price levels of goods and services within a market increase.
Competition: two or more firms, each trying to get consumers to buy their goods.
Temporary Scales: The price range in a market of goods and services.
In conclusion, the market in the economy is based upon multiple factors and components. As stated early in writing, the market very much exists and is affecting lives daily. Entrepreneurs' careers go in the way the market is going in that particular time frame. That is why an entrepreneur needs to adapt on the fly and be innovative in times of need. This allows it to be difficult at times and will enable it to be beneficial, which is the reason entrepreneurs are known for taking risks in order to reach their goal(s).
I thought that your essay provided a good summary of the chapters we were assigned in Bylund’s book and critical economic concepts such as the market, entrepreneurship, and opportunity cost. I can see that you understood the role of society in the market, stating that it is the foundation upon which the market operates. However, I could not see where you provided a clear point of agreement or disagreement with Bylund’s arguments.
While your essay provides a thorough overview of the book's topics, there are a few points where more clarification would be beneficial. For example, your article claims that the market is founded on individuals freely exchanging products. It may be argued, however, that this oversimplifies the market's complexities, particularly regarding the function of institutions and government restrictions.
In addition, the essay’s discussion of capitalism and monopolies could benefit from a more comprehensive examination of the topic. While it is true that monopolies can be detrimental to the market’s functioning, some argue that certain industries require natural monopolies due to high entry barriers, such as electricity and water industries. Additionally, the essay could have delved deeper into the role of government regulation in preventing the formation of monopolies.
I agree with this statement due to a business being only able to grow if its products or services meet the needs and desires of its target market. A business can generate revenue and establish a loyal customer base by producing goofs that consumers find valuable and are willing to pay for, a business can generate revenue and establish a loyal customer base. This is crucial for the long-term sustainability of the business. By prioritizing the needs and desires of its target market, a business can generate revenue. Create a loyal client base, address consumer concerns, and acquire a competitive edge.
Overall, I loved the effort you put into this essay to summarize the key concepts presented in Bylund’s book. However, I suggest that more attention is given to areas where further clarification is required, such as the complexities of the market’s functioning and government regulation’s role in preventing monopolies. I believe that the statement “The key to success is producing a product that meets the consumer’s valuable meter to engage in exchange for the product” is valid and holds true for businesses in any industry. Prioritizing the needs and desires of customers is vital to a business’s long-term success and sustainability. Overall, I appreciate the thought-provoking ideas presented in this essay and look forward to future discussions on these topics.
I completely agree with the section you wrote titled “The How of the Market”, you also brought up some concepts that I did not think of. First, you stated that if someone is not benefitting from the market then they will say that it is not working. This is extremely accurate and is true in many cases. Not just the economy and the market. For example, in government, many individuals disagree with bills and laws that our federal legislators and local officials pass. This does not mean they are doing a bad job or that they are not qualified for the position they have acquired. They simply just have a different viewpoint that someone disagrees with.
The market absolutely exists because as a society we exchange goods and services for something of higher value to us. Whether that be an exchange of different goods, other services, or even just money. These things hold a higher value than what we are “giving away.” If we were all completely self-sufficient, the market would have no reason to exist and therefore would no longer be beneficial to us. Entrepreneurs have made it their mission to provide goods and services that mean more to consumers than the money they will be trading. They want to create items and services that are highly sought after.
I believe that this has always been true and will continue to be true. Just like products, stocks rise and fall daily. There is no way to predict it. Entrepreneurs must keep in mind that their products and services may be very popular one day and not the next. Or, a competitor may provide the same thing at a lower cost. To be an entrepreneur you must face many challenges daily.
I completely agree with your conclusions in this paper. The market would not exist without us, and it affects each of us differently. Without the market we would have to be self-sufficient. We would not be able to get goods from other areas in the country. Meaning, states in the Midwest would have a hard time getting peaches, normally grown in Georgia. To put it simply, the market keeps our society running and without it we would be lost.
I think your essay did a great job explaining the concept of capitalism and thoroughly summarizing your viewpoints. I would have to disagree with your point when you said “> Quote the entrepreneur bases their business and ideas around the future rather than the now.” since entrepreneurs can be forward thinkers but also adhere to the needs and wants of a society during the modern time. I believe it works in both ways and cannot be set and stone to one depiction.
I really liked your point when you said “> QuoteNo day goes by where opportunity cost isn't in the works; it lives within our everyday lives.” because this is something many people have a difficulty grasping. Every second we exist is a second that could be put towards productivity in some domain. That means, if we choose to play video games with an hour of our time, we are actively deciding that hopping online is a better use of our time in that moment than let’s say going to the gym. Because of that decision, you will reap the benefits and downfalls of that choice. You may get better at playing video games, but you also may get less fit. The same opportunity cost applies to the entrepreneur, as they are conscientiously deciding how much time and effort they are willing to put into a product or service. We are constantly analyzing opportunity cost in our every-day lives whether we know it or not. Lastly, you did a great job at keeping the essay short and concise to relay your message. I liked how to the point you were and it is clear you have a good understanding of the basic economic structure that governs the United States. This was especially prevalent when you mentioned that no price is ever set and stone in the market. The market pricing structure is always fluctuating as a variety of variables weigh on the perceived value to the consumer. This is why companies must always continue to grow because eventually the market will get ahead of them and they will fall off. Entrepreneurship is an occupation where one must constantly evolve in order to stay in business. The economy is always changing and so should you.