Introduction To Business And Technology

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Individuals Trying to Satisfy Their Own Wants and Needs Benefit the Rest of the Society
A hermit living in a jungle is oblivious to their surroundings. He/she only wishes to fulfill own fundamental needs, and is least concerned about bringing a change in the environment. On the other hand, individuals seeking to fulfill their own wants and needs explore new avenues and search for the best options, through which their needs can be met. This human tendency leads to new inventions and starts a healthy economic cycle for the society. Economist John Rae was the first specialist to suggest the technical change and invention as a mean of economic growth. The new inventions are used by others, refined and produced on a mass scale. It contributes to industrial growth and increased economic activity. More employment opportunities are created through this economic activity, improving the society’s general standard of living https://goldessays.com/book-reports/

People who have unfulfilled material needs also need more resources. Such individuals work harder and contribute more to the society in terms of human output. Their ...
... desire for a better house or a better car keeps the architects, building material manufacturers or automakers in search of the best and optimal solutions. Hence, technological advancement, economic growth, as well as social development result from the human desire to fulfill wants and needs.

Conditions Necessary for Capitalism to Thrive
Adam Smith is the founding father of capitalism. Capitalism is the economic system, in which the state neither intervenes nor regulates the market fundamentals. Businesses, factories, and lands are privately owned. According to Smith, capitalism thrives in the absence of government interference. In a successful capitalist economy, individuals act in their own interests, trying to gratify their individual needs. People continuously seek out economic activities that promise greater financial rewards. The flow of goods and services is unrestricted. There are no entry and exit barriers for consumers, businesses, and factories.

For capitalism to thrive, the market should be fully competitive. Individuals should not be able to affect the market prices in any way. Another requirement is that consumers should be able to obtain maximum utility, while factories and businesses operate at optimum profit levels. Consumers experience declining marginal utility, whereas businesses experience increasing marginal costs. There are no technological or organizational economies of scale within a firm in the ideal capitalistic environment.

Increased Cost of Heating During Winters
The laws of supply and demand determine the price of any commodity, whereas all other market factors are constant. The price of a commodity increases with a rise in demand, and reduces with an increase in supply. However, the laws of supply and demand further dictate, ‘When, at the ruling price, demand exceeds supply, the price tends to rise’. If the increase in demand is permanent, market forces will again come into play. The supply of that commodity will increase, and price will re-adjust and stabilize after some time. However, in case of a short-term increase in demand, the price will rise for a short time only.

During winters, there is an excessive energy demand for heating homes and businesses. The increased demand is seasonal and temporary. It is not possible to increase production for the winter months only. The increased production capability will remain unutilized in summers when the demand decreases. Hence, during winters, there is a shortage or reduction in supply of energy, while the demand is being increased in comparison. It leads to a temporary seasonal price hike. Higher prices mean higher costs for heating homes and offices in winters.