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Business A Level > External Influences > Flashcards

External Influences Flashcards

1
Q

Define competition

A

rivalry between sellers

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2
Q

define market

A

only situation where buyers and sellers are in contact to establish price

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3
Q

define the difference between physical and non-physical markets

A

p: offers personalisation, physically meet

n-p: convenient, don’t meet physically

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4
Q

define mark up

A

difference between cost of production and selling price

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5
Q

what is ‘market price’?

A

price range customers are prepared to pay

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6
Q

What are the types of market?

A

monopoly, competitive, oligopoly,

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7
Q

what is economies of scale?

A

arise when unit costs fall as output rises

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8
Q

what is dis-economies of scale?

A

arise when unit cost rises as output falls

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9
Q

define competitive market.

A

large number of sellers, mainly based on price (6 t shirts)

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10
Q

define monopoly market

A

dominated by one seller, needs 25% share of market

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11
Q

define oligopoly market

A

market is dominated by a few firms, prices kept similar to keep customers, all follow suit of each other

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12
Q

what is monopolistic competition?

A
  • large number of businesses
  • products are branded
  • customers have loyalty
  • offer non-price diff
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13
Q

define market size

A

no. of individuals in a market who are potential buyers of a products/service

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14
Q

define market growth

A

increase in the demand for a product, measured in % over set time

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15
Q

why is it good for a business to know its size?

A

don’t overprice/overproduce

selling strategy

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16
Q

what is market share?

A

share of total market owned by a particular business, product or brand

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17
Q

What are 3 ways to increase market share?

A
  • be aware of customer needs
  • sell more to existing customers
  • clear marketing plan
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18
Q

Define market dominance

A

measure of strength of a business and its product relative to competition

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19
Q

define barriers to entry

A

factors that could prevent a business from entering a market

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20
Q

define barriers to exit

A

factors preventing a firm from leaving market, even if they wanted to

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21
Q

Give 2 barriers to entry

A
  • large start up costs
  • need to break customer loyalty
  • legal restrictions (patents)
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22
Q

give 2 barrier to exit

A
  • difficulty selling off capital

- contracts with suppliers

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23
Q

define price

A

amount customers are willing to pay

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24
Q

define cost

A

amount spent of producing a product

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25
Q

define merger

A

where 2 companies join together to form a new larger firm

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26
Q

define aquisition

A

where control of another business is achieved by buying a majority of its shares

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27
Q

what does CMA stand for?

A

competition and markets authority

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28
Q

What are the aims of CMA?

A

to make markets work well for customers, businesses and economy

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29
Q

If the supply increases, price …

A

… increases

30
Q

if price increases, demand …

A

… decreases

31
Q

Define demand

A

the amount that customers are willing and able to pay for a good/service at a given price

32
Q

Define supply

A

the amount that sellers are willing and able to sell of a good/service at a given price

33
Q

Define equilibrium

A

situation where demand is equal to supply

34
Q

If a supply factors has a - impact, what happens to curve?

A

shift left

35
Q

Give 5 demand factors

A

price, income, wealth, taste&fashion, ads/campaign

36
Q

Explain the effect of income on demand

A

more disposable income = more avaliable to spend = increased demand

37
Q

Give 3 supply factors

A

price, min. wage, cost,

38
Q

Explain the effect of minimum wage on supply

A

if min, wage increases = the employees will need to be paid more = some may be made redundant = decrease in production rates = less supply

39
Q

Define a substitute.

A

an alternative product that serves the same function

40
Q

Define a complement.

A

a product that is used and therefore bought, in conjunction with another

41
Q

Give an example of a substitute and a complement

A

s: raspberries and strawberries
c: printer and printing ink

42
Q

Define elasticity of demand

A

how sensitive quantity is to a change in price

43
Q

Define inelastic demand

A

quantity is insensitive to change in price (petrol)

44
Q

What is elastic demand

A

quantity is sensitive to change in price (substitutes)

45
Q

Define globalisation

A

process of growth in world markets through integration, where it is possible to trade in global markets as one would in domestic markets

46
Q

Why is it beneficial for a business to import?

A

cheaper production costs, cheaper labour, growth of technology

47
Q

What is a multinational?

A

a company based in one country but manufactures and sells in multiple other countries

48
Q

Why is it beneficial to be a multinational?

A

gain economies of scale, lack advan of lack of legal constraints in LEDC’s

49
Q

Give 1 + and 1 - of multinationals.

A
  • develop local skills, utilise resources

- child labour, income to domestic market

50
Q

Define emerging market.

A

developing countries that are achieving rapid growth and industrialization, and quickly gaining status of developed market

51
Q

What are examples of opportunities?

A
  • new markets, op for more production,
52
Q

What are examples of threats?

A
  • reduced exports as LEDC produce for themselves
53
Q

What are examples of threats?

A
  • reduced exports as LEDC produce for themselves
54
Q

What is the business cycle?

A

the process that the market goes through in terms of growth and time

55
Q

What is a boom on the business cycle?

A

high levels of employment, high demand, encouraged investment

56
Q

What is a recession?

A

confidence is low, employees redundant

57
Q

What are supply side policies?

A

increasing capacity in the economy

58
Q

What are macro economic objectives?

A
  • reduce unemployment
  • increase economic growth
  • control inflamation
59
Q

What is the multiplier effect?

A

change one variable, and there is a visible knock on effect

60
Q

What is meant by market dominance?

A

when a business has majority share of the market (25%)

61
Q

What is meant by merger?

A

When two businesses join and become one larger one

62
Q

What is meant by acquisition?

A

One business takes over the running of another

63
Q

what is meant by organic growth?

A

when a business naturally grows internally

64
Q

what is the influence of the EU?

A

legislation, single currency

65
Q

Give 2 political factors that might influence a business.

A

campaigns, uncertainty, legislation

66
Q

Give 2 economic factors that might influence a business.

A

exchange rates, strength of currency

67
Q

Give 2 social factors that might influence a business.

A

cost of living, disposable income

68
Q

Give 2 technological factors that might influence a business.

A

access to computers, wifi,

69
Q

What is meant by the digital revolution?

A

increase in access to places through the use of technology

70
Q

What is the purpose of legislation?

A

creating equality, good environment to work in, safe, protect data, etc.

71
Q

Give 3 different legislations.

A

data protection, equality, health and safety, working hours

72
Q

explain one legislation

A

eg. working hours - only up to 48 hrs a week

eg. equality - everyone treated equally no matter race, religion etc.

Business A Level (10 decks)

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