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Business > 1.2 > Flashcards

1.2 Flashcards

1
Q

what is supply

A

the quantity of a good or service that a producer is willing to provide to the market place

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2
Q

what goes on the x and y axis of a supply curve

A

x - quantity
y - price

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3
Q

state 6 reasons for shifts in the supply curve

A

changes in technology
government taxes
climate and weather
competition
subsidies paid to producers
external shocks

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4
Q

what is market equilibrium

A

when the quantity demanded equals the quantity supplied at the price that clears the market

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5
Q

describe the supply curve

A

positive correlation

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6
Q

describe the demand curve

A

negative correlation

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7
Q

what are the factors influencing demand

A

income
price of related goods
number of buyers
consumer expectations

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8
Q

what are the factors influencing supply

A

input prices
technology
number of sellers
producer expectations

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9
Q

what does PED stand for

A

price elasticity of demand

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10
Q

what is the equation for PED

A

% change in quantity demand/ % change in price

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11
Q

what is elastic demand

A

demand which changes with price of the product

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12
Q

what is inelastic demand

A

demand which does not change with price of the product

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13
Q

how does the value of PED tell you if a product is elastic or not

A

0 - perfectly inelastic
>1 inelastic
1 unit elastic
<1 elastic

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14
Q

what makes a product elastic

A

luxury goods which consumers don’t need
lots of substitutes
cost of switching is low
consumers have low incomes
low demand

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15
Q

what makes a product inelastic

A

necessities
few substitutes
customers are loyal
addictive products
high income consumers

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16
Q

define market

A

the group of individuals and organizations that make up the pool of actual and potential customers

17
Q

define market size

A

that total value of a market in terms of money spent or number of products

18
Q

define market growth

A

the % change in the size of a market compared to the previous year

19
Q

define market share

A

the percentage of total sales by value or total output that a business has in a specific market

20
Q

define mass market

A

market that is aimed at the general population

21
Q

what are the advantages and disadvantages of mass markets

A

+/ large scale production
marketing is easy
large volume of sales
-/ lots of competition
high marketing costs
production not flexible

22
Q

what is a niche market

A

small subset of the main market that addresses a specialist need

23
Q

what are the advantages and disadvantages of niche markets

A

+/ charge a premium price
easier to target customers
production is flexible
less competition
USP
-/ not constant demand
high unit cost
no economies of scale

24
Q

define dynamic market

A

subject to rapid or continuous changes in supply and demand

25
Q

markets change due to….

A

economic growth
nature of the product
trends
changes in technology
competition

26
Q

what are the 3 ways firms compete

A

price
product range
customer service

27
Q

what is offensive marketing

A

trying to increase sales & develop new markets e.g. innovation

28
Q

what is defensive marketing

A

reacting to competition

29
Q

define innovation

A

improving existing products

30
Q

what are the advantages and disadvantages of innovation

A

+/ competitive advantage
charge a higher price
encourages brand switching
-/ high R&D costs
disruption to production
impact sales of current products

31
Q

what is market orientation

A

decisions are made based on information about customer needs & wants

32
Q

what is product orientation

A

develop product based on what they are good at making

33
Q

define demand

A

the amount of a good that consumers are willing or able to buy at a given price

34
Q

what factors influence demand

A

price
consumers disposable income
substitute availability
trends
advertising
seasonal

35
Q

what are inferior goods

A

basic low quality goods

36
Q

what are substitute goods

A

perform a similar function

Business (22 decks)

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