Introduction à l'économie des affaires

Introduction to Business Economics

• Economics is a social science studying economic agents (consumers, producers, administration) with specific goals, subject to societal and institutional constraints.
• The goal is to explain economic phenomena for optimal decision-making.
• Economic agents are individuals or organizations making economic decisions, categorized by their role (households, businesses, administrations, financial institutions).
• Population encompasses all economic agents in a country, divided into active (production) and inactive (students, children, unemployed, retirees) populations.
• A household consists of one or more people typically related by blood or marriage residing together, collectively forming a country's population.
• A business is an independent production unit generating goods and services, aimed at profitable market sales.
• It uses human, material, and financial resources to fulfill consumer needs, and notably creates jobs.
• Administration provides essential services for the economy, with public services not sold.
• Costs include equipment and operational expenses. Examples include the state, local governments, social security, and labor unions.
• Financial institutions (e.g., banks) facilitate financial transactions.

Branches of Economics

• Microeconomics analyzes business and consumer behavior in scarcity situations.
• Macroeconomics analyzes national production, wealth distribution, economic growth, money supply, inflation, interest rates, exchange rates, and balance of payments in an economy.

Economic Definitions

• Capital: durable assets for production.
• Labor: paid work in production.
• Aggregate: overall economic metric.
• GDP: total output of goods and services in a country during a period.

Additional Economic Concepts

• Economic good: limited, non-free good satisfying needs.
• Utility: ability of a product to fulfill needs (scarcity creates demand).
• External sector: includes territories and countries with economic relations outside national borders.
• Currency: measures value of goods and services, used for payments, savings, or storing wealth.

Forms of Business Organizations

• Sole proprietorships: one-person businesses.
• Partnerships: multiple-person businesses who pool capital.
• Limited Liability Companies (LLC) have limited liability for owners' debts.
• Corporations: separate legal entities (e.g., public, private, mixed).

Criteria for Choosing a Business Structure

• Number of owners/partners.
• Capital contribution.
• Tax implications.
• Liability for business debts.
• Administrative complexity.
• Startup costs.

Elasticity

• Elasticity measures reaction of one variable to changes in another variable.
• Price elasticity of demand measures how demand responds to price changes.
• Price elasticity of supply measures how supply responds to price changes.
• Income elasticity of demand measures how demand responds to changes in income.

Market Types

• Different market structures based on the number of buyers and sellers.
• Market types include perfect competition, monopoly, oligopoly, and monopsony.

Production Theory and Costs

• Producers aim to maximize profits through factor combinations (labor and capital).
• Production function relates output to input factors (labor and capital).
• Cost-minimizing input combination is where the last unit of cost per unit of output is identical for labor and capital inputs.
• Different cost types exist (fixed, variable, total, average, marginal).

Market Equilibrium

• Equilibrium occurs when supply equals demand at a particular price.
• Market equilibrium determines equilibrium price and quantity.

Monopoly

• In a monopoly, a single seller controls the market and can set the price, leading to potential negative consequences from exploitative pricing.
  • Monopolistic markets may produce less product at a higher cost due to reduced competition.
• Demand curve more inelastic due to the lack of alternatives.

Perfect Competition

• Perfect competition: numerous sellers, identical products, free entry, no impact on prices, leading to efficient allocation of resources and consumer surplus.

Optimum Theory

• Optimum occurs when marginal costs and marginal revenues are equal to the price of the product.