1.

Match the Word with the corresponding meaning:

a. Supply c Expensive
b. Demand b Desire to buy any product
c. High price e All people
d. Mass market d the lifetime of goods and services.
e. Life cycle a Disposition to offer products

2. According to the text, mention the things people take into account to
determine the demand.
This characteristic implies that the evaluation of the market should not
determine the level of demand, price and seasonal specialty of the product, but
should also determine the nature of the product that is in demand. The market
defines the product.

3. Write F for false or T for true

a. Production cost depends on Technology F ( ) V (x)
b. As greater the expectations are, the lower will be the offer from the
companies. F (x) V ( )
c. One of the four Ps of marketing mix is Package F (x) V ( )
d. Price is the amount a customer pays for the product F (x) V ( )
e. Planning is to transform and develop marketing objectives to marketing
strategies F (v) V ( )

4. Answer the following questions

a. What is Benchmarking?

Benchmarking is a technique or management tool that consists of taking into

reference the best aspects or practices of other companies, either direct
competitors or belonging to another sector (and, in some cases, to other areas
of the company), and adapt them to the company itself adding improvements.

b. What is the process of Benchmarking?

The benchmarking process consists of carrying out five essential phases. It
begins with the phases of planning and research, continues through the phases
of analysis, integration and action, and finally develops the maturity phase. The
way to conduct these phases involves the realization of a series of steps, the
necessary cases must be carried out to obtain a successful conclusion.

c. Number the aspects to be taken into account in Benchmarking:

Factors that can be measured and compared in a benchmarking process
Among the factors that can be measured and compared in a benchmarking
process are:
• Market share: (In units and in monetary value)
• Profitability: (Return on sales, return on assets and return on equity).
• Competitor growth rates: (Market share by segment)
• Raw materials: (Percentage cost on sales, unit cost of purchase, annual
volume of purchases, exchange rates and freight costs)
• Labor force: (salary scale, percentage cost on sales, labor costs distributed by
department, compensation per hour, demographic indicators)
• Research and development: (basic R & D costs, development time for new
products, improvements to existing products, design for cost reduction).
• Capital costs: (rotation of global assets, rotation of fixed assets, capital
expenditures as a percentage of depreciation, depreciation scales, annual
maintenance costs, maintenance costs, inventory turnover, age of the portfolio,
age of the accounts for payment and capital costs .
• Product characteristics: (size, styles, colors, price allocation strategies,
accessories, guarantees, service support).
• Service: (type and volume of customer complaints, average time of repairs
and prompt delivery)

5. Write the vocabulary (20 words) from the reading, and make a Glossary:
Organize the words in alphabetic order and write the meaning of each word.
Offer: It is the quantity of goods or services for sale that exists in the market for
its offer.
Demand: The amount of product demand that consumers want to acquire within
an economy

The MARKET is the set of activities of purchase and sale of goods and services,
or what is the same, the area where buyers and sellers negotiate the exchange
of a commodity.

The DEMAND FUNCTION collects the amounts of good that consumers are
willing to buy in a series of variables: price of the good, price of other goods,
volume of consumer income and other sociological factors such as fashion and
tastes.

The OFFER FUNCTION collects the quantities of the good that the producers are
willing to offer based on a series of variables: price of the good, price of the factors
of production, objectives of the companies and existing technology.

MARKET EQUILIBRIUM is given when the quantity demanded and the offer of
the good coincide in the market, for a certain price.

Market: group of buyers and sellers of a certain good or service. Any mechanism
or system that allows contact with buyers and sellers of the same service for the
realization of voluntary exchanges.

Competitive market: market in which many buyers and sellers concur in such a
way that the influence exerted by each of them on prices is negligible.

Perfectly competitive market: market in which two characteristics are met: 1)

there is a large number of buyers and sellers in such a way that the influence that
individually exerts on prices is negligible; 2) the goods or services exchanged are
equal.

Oligopoly: market structure characterized by the existence of "few" bidding

companies.

Natural monopoly: market structure in which the presence of economies of scale

makes the existence of a single company more efficient.

Monopoly: industry formed by a single company that offers a product for which it
does not exist, nearby substitutes.

Monopolistic competition: situation of the market in which there are many

companies, each of which produces a good that differs from the others.
Therefore, the various companies have some power to establish prices.

Quantity demanded: quantity of a good that buyers want and can buy at a certain
price.
Law of demand: inverse relationship between the price of a good and the quantity
demanded of that good. That is, when the price of a good increases, the quantity
demanded of that good decreases.

Demand curve: graph that shows the relationship between the price of a good
and the quantity demanded of said good.

Well normal: good, whose quantity demanded increases when there is an

increase in the consumer's income, keeping everything else constant? Your
income elasticity is positive.

Well inferior: well, whose quantity demanded decreases when there is an

increase in the income of the consumer, keeping everything else constant? Your
income elasticity is negative.

Well, Giffen: well, whose quantity demanded increases when there is an increase
in its price.

Complementary goods: goods that are consumed together to satisfy a need and
that present a negative cross-elasticity.

Substitute goods: goods that can be used alternatively to satisfy the same need
and that present a positive cross-elasticity.

Ceteris paribus: Latin expression meaning "remaining everything else constant".

In economics we used to mean that all the variables that could influence our
variables of interest remain constant.

Quantity offered: quantity of a good that sellers want and can sell at a certain
price.

Law of the offer: positive relationship between the price of a good and the
quantity offered of said good, ceteris paribus.

Supply curve: graph that shows the relationship between the price of a good and
the quantity offered of that good.

Balance: situation in which there is no tendency to change because of the

purchase and sale plans of plaintiffs and bidders are fulfilled, so that the market
empties.

Equilibrium price: price at which quantity demanded and quantity offered equal,
emptying the market.

Equilibrium quantity: quantity offered and demand when the price has been
adjusted to balance supply and demand.
Market in equilibrium: market that is emptied as a price is reached at which
quantity demanded and the quantity offered equal.
Excess demand: situation in which the quantity demanded exceeds the quantity
offered for a given value of the price.

Excess supply: situation in which the quantity offered exceeds the demanded
quantity, for a given price value.

Law of supply and demand: law that establishes that the price of a good will be
adjusted to balance its supply and demand.

6. Write a ten lines text that summarizes the topic of the activity.
Supply and demand is when a price is fixed on a product and must be met to be
offered; What is this? What are the instruments for the determination of prices,
when the supply is higher than the demand, when the demand is higher than the
supply? Buyers push up the price of goods. Demand depends on the offer of the
prices.
Supply and demand takes into account the effect on production costs, which is
considered to be indirect because it affects the prices of supply, demand or both
prices.
In the past, demand was the best for which prices were accessible and products
were available to people because money was more valid.