SOI: Understand that businesses operate within a system whose structure is influenced by (causality) external factors.

The supply and demand in a market is influenced by the amount of product is produced and if the customers are willing to buy it or not. These factors would cause either the supply curve to shift or the demand curve to shift. Usually when a curve shifts to the right, it means that it increased, but when it shifts to the left, it decreases. When the quantity demanded and quantity supplied is equal to the price, the equilibrium is reached in the market. The price usually depends on either of the curve shift, which would eventually cause a surplus or a shortage. If a surplus occurs, the price of the product would decrease to get more customers to buying the product, and if there is a shortage, the price of the product would increase.

Economic sectors can relate to each other by creating a chain of production. The chain of production is the process of a product, from raw materials to the final product. In the beginning, there is a primary sector, which is to collect and assemble all the raw materials needed for the product. The second part is the secondary sector, when the raw materials are put into use, to start creating the product. Finally, the tertiary sector is when the final product is already created and is being sent out to stores.

There are many companies that indirectly compete with another company. Indirect competition is when different companies, that does not sell the same products or goods, can satisfy the same customer’s needs or wants. An example is when a store sells burgers, and another store sells sandwiches. They are both different, but it can still satisfy the customer’s needs or wants since they are also similar, both contains bread and consists of some meat, or vegetable.