Oct 22, 2025

Economics

• Economics in business refers to the economic principles supply and demand, costs, and market structures that are applied to make business decisions.

How do I remember it?

• Business = Choices + Money + Markets

What to produce?

How much to charge?

How many workers to hire?

Whether to expand or shut down?

Real world example

• Streaming platforms use economics to determine:

Pricing: They analyze what customers are willing to pay for streaming (demand).

Cost Decisions: They look at the cost of producing new shows versus buying existing ones.

Expansion: Before entering a new country, they study the local economy. Things like how much people earn, internet access, and much more.

If they see people are canceling subscriptions during inflation, they might offer a cheaper ad-supported plan! That is one direct response to economic conditions.