define

Question 1

private sector organizations

Answer 1

orgs that are owned by individuals or companies and not the state, aiming to make profit.

Question 2

sole trader or sole proprietor

Answer 2

a business where only one person owns and controls the business.

Question 3

partnerships

Answer 3

a business formed by two or more people, typically between two to twenty people.

Question 4

limited company

Answer 4

businesses that have gone through legal formalities to be registered, usually with the government and thus owners have limited liability.

Question 5

dividends

Answer 5

the share of profits that shareholders are paid

Question 6

co-operatives

Answer 6

business owned by members and democratically controlled by member votes.

Question 7

consumer co-operative

Answer 7

owned by consumers who buy goods or services from their co-op

Question 8

producer co-operative

Answer 8

owned by producers of commodities who work together to process and market their products

Question 9

worker co-operative

Answer 9

owned and democratically governed by employees who become co-op members

Question 10

public sector / state owned enterprises

Answer 10

large organizations that are created by a countries government to carry out commercial activities

Question 11

not-for-profit organizations

Answer 11

organizations that do not have profit making as a goal, and instead use surplus to support their aims.

Question 12

joint ventures

Answer 12

where separate business entity is created by two or more parties.

Question 13

monopolists

Answer 13

a firm that sells a product for sale which is available from no other company, perhaps because the product is unique or because of the distance of the next best alternative.

Question 14

small and medium sized firms (SMES)

Answer 14

independent businesses that typically employ fewer than 250 people and have a turnover below a certain threshold (which varies by region).

Question 15

organic growth

Answer 15

a firm increasing its size through investments in capital equipment or an increased labor force

Question 16

Market penetration

Answer 16

a growth strategy that involves increasing sales of existing products or services to existing customers through methods like price reduction and increased advertising.

Question 17

merger

Answer 17

the joining together of two or more firms under a common ownership. the boards of directors, along with the shareholders, agree to merge the firms together.

Question 18

takeover

Answer 18

when one company acquires control of another company, typically by purchasing a majority stake in its shares. This can be friendly (agreed by both companies) or hostile (when the target company opposes the acquisition).

Question 19

Horizontal integration

Answer 19

occurs when two or more companies operating in the same industry, in the same stage of production, merge or acquire each other.

Question 20

Vertical integration

Answer 20

when a company merges with another company involved in the same industry but a different stage of the production process

Question 21

Conglomerate integration

Answer 21

when a company acquires or merges with businesses in unrelated industries.

Question 22

Forward vertical integration

Answer 22

when a company merges with a business that is further along in the production or distribution process, or closer to consumers. For example, a car manufacturer acquiring a car dealership

Question 23

Backward vertical integration

Answer 23

occurs when a company acquires or merges with a business that is earlier in the production process, or closer to production. For example, a steel manufacturer acquiring an iron ore mine

Question 24

Economies of scope

Answer 24

economic factors that make the simultaneous manufacturing of different products more cost-effective

Question 25

asset stripping

Answer 25

the practice of buying a company for cheap and then selling all the things it owns for a profit

Question 26

demerger

Answer 26

when a firm splits itself into two or more separate parts to create two or more firms - a part might’ve been sold too

Question 27

synergy

Answer 27

the combined power of a group of things when they are working together that is greater than the total power achieved by each working separately

Question 28

stakeholders

Answer 28

anyone with interests in a firm’s activities

Question 29

Predatory pricing

Answer 29

pricing strategy where a firm sets its prices artificially low with the intent to drive competitors out of business. Once competitors have exited the market, the firm can then raise prices to recoup its losses and enjoy higher profits.

Question 30

shirking

Answer 30

the behavior of an agent (e.g., an employee) who exerts less effort or takes fewer risks than is expected or required by their principal

Question 31

Moral Hazard

Answer 31

lack of incentive to guard against risk where one is protected from its consequences, e.g. by insurance.

Question 32

Adverse Selection

Answer 32

occurs when one party in a transaction has more information than the other party, leading to an unfavorable outcome for the less informed party.

Question 33

Limit pricing

Answer 33

strategy where a dominant firm sets its price below the competitive level to deter potential entrants from entering the market. shows a willingness and ability for large firms to compete.
examples - netflix, spotify, amazon books

Question 34

revenue

Answer 34

receipts of money from the sale of goods and services over a period of time

Question 35

total revenue

Answer 35

total amount of money received from the sale of any given level of output

Question 36

average revenue

Answer 36

average amount received per unit sold

Question 37

marginal revenue

Answer 37

additional amount received from selling an extra unit of output

Question 38

Short run

Answer 38

period of time during which at least one factor of production is fixed

Question 39

Long run

Answer 39

period of time during which all factors of production are variable