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Bus201 > Ch3 > Flashcards

Ch3 Flashcards

1
Q

Microeconomics

A

How prices and quantities of goods and services behave in a free market

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2
Q

Quantity demanded

A

The quantity of a good or service people are willing t buy at various prices.
Price high-> demand low
Price low-> demand high

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3
Q

Quantity supplied

A

Quantity of a good or service that businesses will make available at various prices.
Price high -> supply more
Price low -> supply less

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4
Q

How do demand and supply interact to determine prices

A

Quantity demanded depends on the $ of the product or service and quantity supplied also depends on the price of a product or service

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5
Q

Equilibrium

A

Where demand and supply curve meet. Is achieved by market adjustments of quantity and price.
Quantity supplied= quantity demanded

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6
Q

What causes changes in demand curve

A

Income, fashion, taste, increase in price

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7
Q

What causes changes in supply curve

A

Price of labour, fabric price goes up, changed in price of other goods.

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8
Q

4 types of market structures

A

Perfect competition: many firms, no ability to control prices, no barriers to entry, very little product differentiation, eg. Wheat, corn
Pure monopoly: only one firm, ability to control prices is high, government regulations are a barrier to entry, no direct competition, eg. Utilities, water/oil
Monopolistic competition: fewer firms than perfect competition, some ability to control prices, few barriers to entry, some difference between products, eg. Clothing
Oligopoly: few firms, some ability to control prices, many barriers to entry, some differences between products, eg. Phones, banks

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9
Q

Relationship management

A

Involves building, maintaining, and enhancing interactions with customers and other parties to develop long-term satisfaction through mutually beneficial partnerships.

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10
Q

Long term customers

A

Buy more, take less of company’s time, less sensitive to price, bring in new customer, no start up fee.

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11
Q

Strategic alliances

A

Forming cooperating agreements between business firms.

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12
Q

Porters 5 forces

A

Helps the analyst determine strengths, weaknesses, opportunities, and thoughts, (SWOT) faced within a market so they can develop a strategy to compete properly. It is used to analyze a competitive market. Threat of new entry, threat of substitute, buyers power, supplier power, competitive rivalry

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13
Q

Threat of new entry

A

Time and cost of entry, specialist knowledge, economics of sale, cost advantage, and tech advantage

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14
Q

Threat of substitute

A

Substitute performance, cost of changing

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15
Q

Buyers power

A

Number of buyers, size of each order, product differences, price sensitivity, cost of competitive substitutes

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16
Q

Suppliers power

A

Number of suppliers, size of supplies, frequency of service, ability to substitute, price of substitutes

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17
Q

Competitive rivalry

A

Number of competitors, quality of differences, switching costs, customer loyalty.

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18
Q

Strategies for pricing products

A

Price: perceived values that is exchanged for something else
Perceived value: referred to the perception of the products value at the time of transaction
Barter: when products are exchanged for one another

19
Q

Why is price important

A

Important in determining how much a firm earns

20
Q

Maximize return

A

Charge a price that will allow the firm to earn a fair return on investments

21
Q

Market share

A

Total % of total market in terms of volume or revenue

22
Q

Price skimming

A

Introducing a product at a high price and then lowering the price over time

23
Q

Penetration pricing

A

Company offers new products at low prices in the hopes of achieving a large sales volume

24
Q

Leader pricing

A

Pricing products below the normal markup, or even below cost, to attract customers to a store they wouldn’t otherwise not shop at.

25
Q

Pricing of services

A

May be priced as standard services. Harder to price than goods

26
Q

Bundling

A

Grouping two or more related products together and pricing them as a single product

27
Q

Psychological pricing

A

Setting a price at an odd number to connote a bargain at an even number to imply quality.

28
Q

Prestige pricing

A

Raising price of a product so it is perceived as being higher quality.

29
Q

Unethical business activities

A

Taking things that don’t belong to you, saying things that you know aren’t true, giving or allowing false impressions, buying influence or engaging in conflict interest, hiding or divulging info, taking unfair advantage, committing improper personal behaviour, abusing power and mistreating individuals, permitting organizational abuse, violating rules

30
Q

Justice

A

What is fair according to prevailing standards of society

31
Q

Utilitarianism

A

Focuses on the consequence of an action taken by a person or organization. Always involves winners and losers.

32
Q

Deontology

A

Person will follow his or her obligations to another individual or society be upholding ones duty is what’s considered ethically correct

33
Q

Individual rights

A

Certain rights that exist under certain conditions regardless of any external circumstances

34
Q

Leading by example

A

Leaders and managers establish patters of behaviour within the organization that determine what’s acceptable and what’s not

35
Q

Corporate social responsibility (CSR)

A

Consists of obligations beyond those required by law or union contract

36
Q

4 key components of CSR

A

Economic, legal, ethical, philanthropic.

37
Q

Illegal and irresponsible behavior

A

Most companies

38
Q

Responsibilities to employers

A

Provide jobs to employer, letting them have time to enjoy and communicate, provide safe, clean, working environment

39
Q

Responsibility to society

A

Provide community with jobs, goods, and services

40
Q

Responsibility to customers

A

Satisfy customers, firm must deliver promises

41
Q

Environmental protection

A

Responsible for protecting and improving the worlds fragile environment

42
Q

Corporate philanthropy

A

Cash contributions, donations of equipment, support for the volunteer efforts

43
Q

Responsibilities to investors

A

Company’s relationship with investors entail social responsibility.

Bus201 (8 decks)

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