1.7 Expanding A Business

Question 1

Internal/organic growth

Answer 1

occurs when a business
gets bigger by selling
more of its products

Question 2

External growth/ intragration

Answer 2

occurs when a business
gets bigger by joining or
buying other businesses

Question 3

Market Capitalization

Answer 3

Market price of a share
X
Amount of shares

Question 4

Feanchise

Answer 4

A franchisor sells the rights to it’s product to a franchisee

Question 5

E-commerce

Answer 5

The act of buying and selling products online

Question 6

Outsourcing

Answer 6

Using another business to source materials eg. for your business

Question 7

Merger

Answer 7

When two or more businesses join together to form a new business

Question 8

Takeover

Answer 8

When a business buys controls over another one

Question 9

Economics of Scale

Answer 9

occur when a business’s
unit costs of production
fall as its output rises and
the business expands

Question 10

Diseconomics of scale

Answer 10

occur when the cost
per unit increases as
business expands.