2.5 Flashcards
(17 cards)
consumer protection
- consumers treated fairly from companies which they buy
e.g. sale of goods act, goods must be fit for purpose for what they are sold - creates a level playing field for competition
employee protection
protects the rights of employees at work
e.g. national minimum wage
sick pay
uk businesses argue that increased employee protection reduces competitiveness with international rivals
environmental protection
laws governing the impact of the business on the environment
- materials and processes that the business uses to make the product
- could lead to increased costs
competition policy
prevents growth of monopoly power
- government funded CMA (prevents mergers and takeovers)
- harder to do this potentially harder to grow
health and safety legislation (what are consequences)
ensures safety of employees and customers within the workplace
- could be fined alot of money if not followed
competitive environment definition
number and strength of competitors in the same market as a business
impact of competition
+increased innovation and efficiency
+ wider product range
- have to lower price
-increased promotion cost
market definition
a place where buyers and sellers meet to exchange goods and services
inflation definition
a sustained increase in prices within an economy ovr a period of time
inflation defintion
SUSTAINED increase in prices within an economy over a period of time
Factors that determine effect of changing exchange rates
amount the business exports/ foreign materials (more exports more affected by exchange rates)
price elastic demand
negative affects of inflation on businesses
- costs and price rises - demand may fall depending on PED
- ## higherinterest rates - less groth - recession?
effects on increase in interest rates
- Higher borrowing costs
- firms may delay investment
- less economic growth - Lower consumer spending
- less disposable income , mortgage increased
- revenuie decreases esp for luxury good and price elastic products - Cash flow problems - liquidity
FIRMS WITH MORE DEBT ARE MORE VULNERABLE
Taxation is
effect of changing taxes
Taxation is a financial charge imposed by governments on individuals and businesses to fund public services.
Direct tax (payed by businesses) - lowers profits
indirect taxes (payed by consumers) - VAT makes goods more expensive - reduces demand
small businesses pay proportionally larger amounts of tax yes
features of monopolies
market dominated by single seller
high barries to entry
can set price
limited consumer choice
eos
oligopoly features
market dominated by a few large firms
high barriers to entry
non price competition stable prices
monopolistic markets
many small firms offering similar but slightly differentiated products
low barriers to entry
highly competitive
