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A-level Business Studies > Blackwell theme1 > Flashcards

Blackwell theme1 Flashcards

1
Q

Demand definition

A

The amount of a good/service that customers are willing and able to purchase at any given price.

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2
Q

Definition of supply

A

The amount of a good/service a seller is willing and able to sell at any given price

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3
Q

When the market price increases, the supply would ….

A

Increase

Suppliers want to maximise profits by selling at a higher price

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4
Q

Mark up

A

Difference in market price.

Businesses enjoy a higher mark up

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5
Q

Equilibrium price

A

The situation in the market where demand is equal to supply

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6
Q

When relating to price we …

A

Move along the curve. Any other demand factor we shift the demand curve

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7
Q

Demand factors

Can also be referred to as market forces

A
  • wealth(assets,jewellery,own shares)
  • advertising
  • income
  • Population
  • price of substitutes and complements
  • trends(taste and fashion)
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8
Q

Supply factors shifting supply

Can also be referred to as market forces

A 
Costs
Price
Subsidies
Taxes
Natural factors(flood, drought)
Technology
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9
Q

Excess demand

A

Is below

Shortage
Forces the market price to increase so demand decreases
Reaching a new equilibrium

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10
Q

Excess supply

A

Above

(Surplus)

Price is forced down, decreasing supply
Reaching a new equilibrium

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11
Q

What is the elasticity of demand ?

A

Measures how sensitive/responsive quantity demanded is to a change in price

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12
Q

What is meant by inelastic demand ?

A

Quantity demanded is insensitive to a change in price

People buy it whatever the price

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13
Q

The steeper the curve…

A

The more inelastic the good Is

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14
Q

The flatter the curve

A

The more elastic the product is

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15
Q

Non-physical markets meaning

A

Online shopping and distributing

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16
Q

Physical markets meaning

A

Buyers can meet sellers and purchase face to face

17
Q

Economies of scale

A

Businesses can buy supply in bulk and gain from economies of scale as the unit costs of production will fall.

18
Q

Competition market

A
  • Many firms
  • low prices(usually)
  • compete on price
19
Q

Monopoly market

A
  • one firm in theory
  • or own more than 25% of the market share
  • high prices usually
  • not always high pricing. If there was a new entrant in the market undercutting the price of the monopoly, the monopoly would lower prices to push out the entrant out of the market
20
Q

Oligopoly

A
  • dominated by few firms
  • compete on price
  • collusion(two rivals secretly co-operate for mutual benefit)
  • high prices which are similar
21
Q

Monopolistic competition

A
  • many firms
  • prices are similar
  • compete on non-price differences
22
Q

Calculating unit costs=

A

Total production costs in period (time)/ total output in period (units)

23
Q

State two characteristics of a monopoly market

A
  • Higher prices

- inferior products

24
Q

Market size meaning

A

The value of the combined sales of all the firms in a market

25
Q

Market growth

A

The percentage change in the size of the market , measured over a specific market

26
Q

Ways of increasing market share

A

Promotional offers
Higher quality products/good
Online shopping
Advertising

27
Q

Barriers to entry

A

The factors that could prevent a firm from entering and competing in a market.

28
Q

Economies of scale

A

Where firms buy supply in bulk to cut down unit costs.

29
Q

Low barriers of entry markets

A

Pure competition

Monopolistic competition

30
Q

High barriers of entry markets:

A

Oligopoly

Pure monopoly

31
Q

Barriers to entry factors

A

Large start up costs. Capital
Having marketing budget to break customer loyalty
The inability to gain from economies of scale
The possibility that other businesses will start at price war
Legal restrictions such as patents

32
Q

Barriers to exit factors

A
  • Redundancy costs
  • Contracts with suppliers. If they don’t pay it there could be a huge legal challenge
  • The difficulty of selling off capital (technology,tills,pictures,furniture,shelves)
33
Q

What 2 markets have market power

A

Oligopoly’s

Monopoly markets

A-level Business Studies (8 decks)

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