2.6 Competition

Question 1

What is a market?

Answer 1

A market exists where there are buyers and sellers.

Question 2

Competition

Answer 2

Competition exists when more than one business is attempting to attract the same customers.

Question 3

Monopoly

Answer 3

A monopoly exists when a business does not face any competition in a particular market.

Question 4

Market share

Answer 4

Market share is the percentage of sales in a particular market recorded by a business.

Question 5

Uncertainty

Answer 5

An uncertainty occurs where there is a lack of information about a situation. This means the outcome or consequences are very difficult to predict.

Question 6

Risk

Answer 6

Risk is the possibility of something going wrong.

Question 7

Business plan

Answer 7

A business plan is a document setting out what a business does and what it hopes to achieve
in the future.

Question 8

Diversification

Answer 8

Diversification occurs when a business starts selling new products in new markets.

Question 9

A recession

Answer 9

A recession occurs when the value of an economy’s output of goods and services falls for six months or longer.

Question 10

Entrepreneur

Answer 10

An entrepreneur is someone who is willing to take the risks involved in starting a new business.