chapter 3

Question 1

environmental scanning

Answer 1

process of observing/collecting information about environmental forces

Question 2

What are the approaches to environemal forces?

Answer 2

Passive - accepting them as uncontrollable
Proactive - attempting to influence and shape them

Question 3

Monopoly

Answer 3

when one organization is the sole source of a product (no substitutes)

Question 4

Oligopoly

Answer 4

few large sellers who are dominant in the market

Question 5

Monopolistic competition

Answer 5

when a firm as many potential competitors and attempts to make their product stand out through marketing

Question 6

Pure competition

Answer 6

extremely large number of sellers; all equal (does not exist)

Question 7

What are the components of the business cycle?

Answer 7

Prosperity, Recession, Depression, Recovery

Question 8

Buying power

Answer 8

resources like money, goods and services, that can be traded in exchange for something

Question 9

Disposable income

Answer 9

after-tax income

Question 10

Discretionary income

Answer 10

income left after purchasing basic needs (food, shelter, clothing)

Question 11

Self regulatory forces

Answer 11

rules created and enforced by industries themselves

Question 12

Precompetitive legislation

Answer 12

laws designed to maintian competition and prevent monopolies, price fixing, or unfair trade (ex. Sherman anti-trust act)

Question 13

Consumer protection legislation

Answer 13

laws aimed to protect consumers from unfair business practices

Question 14

Encouraging compliance with laws and regulations (OSHA)

Answer 14

promotes firms to sticking to legal requirements

Question 15

Regulatory agencies

Answer 15

government bodies that are created to enforce laws in specific areas (ex. FDA)