External Influences

Question 1

Competition

Answer 1

Rivalry between businesses who are similar

Question 2

Market

Answer 2

Buyers and sellers come in contact in order to establish a price

Question 3

Market price

Answer 3

The price range in a market which consumers are prepared to pay

Question 4

Mark up

Answer 4

Difference between the cost of producing an item and the price at which it is sold

Question 5

Competitive market

Answer 5

Market with lots of sellars in

Question 6

Monopoly

Answer 6

A market dominated by 1 seller

Question 7

Economies of scale

Answer 7

The arise when unit costs fall as output prices

Question 8

Oligopoly

Answer 8

Market is dominated by a few firms

Question 9

Monopolictic competition

Answer 9

Non price differences. There are lots of businesses,lots of similar branded products

Question 10

What % of the market share do firms need to be a monopoly

Answer 10

25%

Question 11

Name 3 key features of monopolistic competition

Answer 11

Lots of firms
Low prices
Advantage over another

Question 12

market size

Answer 12

Number of individuals in a market who are potential buyers of a product

Question 13

Market growth

Answer 13

Increase in demand for a business product

Question 14

Market share

Answer 14

The share of the trade market that is owned by a business

Question 15

Name 6 strategies to increase market share

Answer 15

Clear market plan
Pricing
Merge with a competitor 
Beware of customer needs 
Sell to existing customers

Question 16

Market dominance

Answer 16

The measure of strength of a business and its products relative to competition

Question 17

Barrier to entry

Answer 17

Factors which could prevent a firm from entering a market

Question 18

Name 5 barriers to entry

Answer 18

Large start up costs
Breaking customer loyalty
Inability to gain economies of scale
Legal restrictions e.g patents

Question 19

Barriers to exit

Answer 19

Factors that could prevent a firm from leaving a market

Question 20

Name 3 barriers to exit

Answer 20

Selling off capital stock
High redundancy costs
Contracts with suppliers

Question 21

Stake holder

Answer 21

A group who are interested in a business

Question 22

Merger

Answer 22

This is when a company joins together to form a new larger business

Question 23

Acquisition

Answer 23

Where control of another company is achieved by buying a majority of its shares

Question 24

Name 5 advantage of merging/ acquisition

Answer 24

Greater reach throughout area. 
Expands commercial sectors
Acquire new skills
Eliminate competition 
Increase market share

Question 25

Name 4 disadvantages to merging/acquisition

Answer 25

High costs Upset customers/supplier Problems with intergration Questionable motifs

Question 26

Demand

Answer 26

The amount of good that a customer is willing to buy at any given price

Question 27

Supply

Answer 27

The amount of good that sellers are willing to sell at any given price

Question 28

Equilibrium

Answer 28

The situation in a market where demand is equal to supply

Question 29

What happens if there's excess demand in a market

Answer 29

Supply+price would increase because more people are wanting the product

Question 30

What happens if there excess supply on the market

Answer 30

Supply+price would decrease because people aren't buying it

Question 31

Elasticity of demand?

Answer 31

Measures how sensitive quantity demanded is to change in price

Question 32

Inelastic demand?example

Answer 32

Quantity is insensitive to a change in price e.g petrol

Question 33

Elastic demand

Answer 33

Quantity is sensitive to a change in price

Question 34

Globalisation

Answer 34

Lots of counties trading in each others market

Question 35

5 reasons to why products are imported

Answer 35

``` Cheap labour Cost of production is cheaper Cheap resources Reduced trade restrictions Better infrastructure ```

Question 36

What facilitates globalisation

Answer 36

Technology | Easy movement of people/money

Question 37

Multinationals

Answer 37

A company that is based in one country and manufacturs and sells in a variety of countries

Question 38

Why should companies be multinationals

Answer 38

Economies of scale Ability to take advantage of lack of legal constraints New markets- less competition Take advantage of low wager

Question 39

Name 3advantages to being a multinational for the country

Answer 39

Jobs available in LEDC's Developed skills in LEDC's Infrastructure

Question 40

Name 3disadvantages of becoming a multinational for the country

Answer 40

Jobs low in skill- isn't positive future Wages are low Unsafe working conditions

Question 41

What's an emerging market

Answer 41

Refer to developing countries that are achieving rapid growth and industrialisation

Question 42

What are the opportunities to emerging markets

Answer 42

High disposable income | Investments

Question 43

What are the threats to becoming an emerging market

Answer 43

Low labour costs | Greater independence from emerging economies