Industrial Flashcards
1
Q
Is a distinctive branch of economics which deals with the economic problems of firms and industries, and their relationship with society.
A
Industrial Economics
2
Q
Elements of Industrial Economics
A
Descriptive
Analytical
3
Q
Is concerned with the information
content of the subject.
A
Descriptive element
4
Q
Is concerned with the business policy and decision-making.
A
Analytical element
5
Q
Is the economic field that studies the strategic behavior of firms, and their interaction to determine the structure of markets.
A
Industrial Organization
6
Q
Is an organization owned by one or jointly by a few or many individuals which is/are engaged in productive activity of any kind for the sake of profit or some other well-defined aim.
A
Firm
7
Q
Is a group of firms producing closely
substitute goods for a common group of buyers.
A
Industry
8
Q
Is defined as a closely interrelated group of sellers and buyers for a commodity.
A
Market
9
Q
Is a microeconomic concept that states that a firm exists and make decisions to maximize profits. A firm maximizes
profits by creating a gap between revenue and costs.
A
Theory of Firm
10
Q
Types of Firm
A
Sole Proprietorship
Partnership
Limited Liability Company (LLC)
Corporation
Non-profit Organization
Cooperative
11
Q
Is a business owned and operated by a single individual. It is the simplest form of business organization, with the owner having full control over decision-making and retaining all profits but also bearing all liabilities and risks.
A
Sole Proprietorship
12
Q
Is a business owned and operated by two or more individuals who share profits, losses, and responsibilities.
A
Partnership
13
Q
Is a hybrid business structure that combines the limited liability protection of a corporation with the flexibility and tax benefits of a partnership. Owners of this type of firm, known as members, are not personally liable for the company’s debts and obligations.
A
Limited Liability Company
14
Q
Is a legal entity that is separate from its owners, known as shareholders. They have limited liability, meaning that shareholders are not personally liable for the firm’s debts.
A
Corporation
15
Q
Is a type of firm that operates for charitable, educational, religious, or social welfare purposes rather than for-profit motives. They are exempt from paying taxes on income generated from activities related to their miss
A
Nonprofit Organization
16
Q
Is a business owned and operated by its members, who share profits, benefits, and decision-making authority. They can take various forms, including consumer cooperatives, worker cooperatives, and producer cooperatives.
A
Cooperative
17
Q
Money or income that a company receives from selling its product.
A
Revenue
18
Q
What results when a business subtracts its costs from its revenue.
A
Profit or Loss
19
Q
Weighing the costs and benefits of an
action in order to maximize the net benefit from the action.
A
Cost-Benefit Analysis
20
Q
Satisfaction realized from the consumption of a good or service or taking action.
A
Utility
21
Q
The cost of acquiring a good or service or taking action measured in terms of the value of the opportunity or alternative forgone.
A
Opportunity Cost
22
Q
Payments that a business makes to acquire factors of production, such as labor, raw materials, and machinery.
A
Explicit Cost
23
Q
The opportunity costs to business owners from using their resources in the business rather than in an alternative
opportunity.
A
Implicit Cost
24
Q
Profit necessary to recover implicit costs and keep a business in operation.
A
Normal Profit
25
Revenue received from selling a certain
quantity of an item; calculated by multiplying the price of an item by the quantity demanded at that price. (Price x Quantity)
Total Revenue
26
The change in total revenue when one
more (or additional) unit of an item is demanded.
Marginal Revenue
27
Is the cost of producing a specified number of output units.
Total Cost
28
Measures the change in total cost from
producing each additional unit of output.
Marginal Cost
29
Shows the type and amount of output
that results from a particular group of inputs when those inputs are combined in a certain way.
Production Function
30
A production time frame in which some factors of production are variable in amount and some are fixed.
Short Run
31
Factors of production that change in amount as the level of output changes.
Variable Factors
32
Costs of using variable factors.
Variable Costs
33
Factors of production that do not change in amount as the level of output changes.
Fixed Factors
34
Costs of using fixed factors.
Fixed Costs
35
A production time frame in which all factors of production are variable in amount.
Long Run
36
The cost of all fixed factors; does not
change as the level of output changes and must be paid even when output is zero.
Total Fixed Cost
37
The cost of all variable factors of
production; increases as the level of output increases but is zero when output is zero.
Total Variable Cost
38
The cost of acquiring and using all factors of production; total fixed cost plus total variable cost.
Total Cost
39
The cost per unit of output produced;
total cost divided by the number of units produced.
Average Total Cost
40
The change in total cost when one more
unit of output is produced.
Marginal Cost
41
Is the total expenditure for each level of
output in the long run.
Long-run Total Cost
42
measures the per unit cost in the long run
Long-run Average Cost
43
Measures the cost of producing an
additional unit of output in the long run.
Long-run Marginal Cost
44
Occur when the increasing size of
production, in the long run, causes the per unit cost of production to fall.
Economies of Scale
45
Occur when the increasing size of
production, in the long run, causes the per unit cost of production to rise.
Diseconomies of Scale
46
Occur in the range of production
levels in which long-run average total cost is constant.
Constant Returns to Scale
47
The forces of supply and demand determine the number of goods and services produced as well as market prices set by the companies in the market.
Perfect Competition Market Structure
48
there is a single seller dominating the market, with no close substitutes for its product
Monopoly
49
Does not assume the lowest possible cost of production. That little difference in the definition leaves room for huge differences in how the companies operate in the market. The companies under this type of market structure sell very similar products with slight differences they use as the basis of their marketing and advertising.
Monopolistic Competition
50
Is a market structure characterized by a small number of large firms dominating the market, with significant barriers to entry and interdependence among firms. A market structure where a few companies dominate the market.
Oligopoly
51
Is a place where parties can gather to
facilitate the exchange of goods and services.
Market
52
Is the ability of a business to set their
prices above a level that would exist in a highly competitive market.
Market Power
53
Happens when business add a markup to the cost of production to determine the selling price. The markup is typically set to ensure that the firm earns a target profit margin on each unit sold.
Cost-Plus Pricing
54
This appears when firms set a high initial price for a new product, and then they gradually lower the price as demand
decreases.
Price Skimming
55
When firms release their new products at a low initial price to attract customers.
Penetration Pricing
56
This involves offering multiple products or services together at a discounted price.
Bundling Pricing
57
Involves setting prices based on the perception of the value of the product, rather than the actual cost of production.
Psychological Pricing
58
Non-price Stategies
Physical Characteristics/Appearance
Location
Service Level
Advertising
59
Is a strategy that implies reducing prices to
compete with rivals. The technique is popular among the sellers of the same products since they have similar features, yet the price points can differ.
Price Competition
60
Refers to a situation in which firms in a
market compete primarily by adjusting the
quantities of goods or services they
produce or supply, rather than focusing on
prices.
Quantity Competition
61
A type of preference structure modeling, is a powerful tool for understanding what drives customer interest and purchase decisions. It’s considered to be the most scientifically robust way to discover and understand how customers make choices.
Choice Modelling
62
Happens when the price that consumers pay for a product or service is less than
the price they're willing to pay.
Consumer Surplus
63
Products are differentiated with each
other according to the individuals
preferences, taste, or subjective
perceptions
Horizontal Differentiation
64
Several goods that are present can be ordered according to their objective quality from the highest to the lowest.
Vertical Differentiation
65
Refers to the process of determining a product or service's value before making a choice. Amount that a company or business charges for an item.
Pricing
66
It assists the business in setting prices that balance market and consumer demand with the goal of maximizing profits and shareholder value.
Pricing Strategy
67
Adds a fixed percentage to the manufacturing costs for each unit. This pricing technique is also known as "mark up pricing."
Cost Plus Pricing
68
The act of determining the price of your goods or services by looking at what your competitors in your industry are charging as opposed to your cost and target profit margin.
Competition-based Pricing
69
Takes into account how much customers appreciate the services you offer and modify your prices accordingly.
Value-based Pricing
70
Strives to attract clients by offering goods and services at a cheaper price than competitors. By encouraging brand identification and lotalty.
Penetration Pricing
71
The goal is to convince the most cost-conscious consumers to buy the goods.
Economy Pricing
72
Companies that demand high pricing do so because they have a unique brand or product that sets them apart from competitors.
Premium Pricing
73
A tactic typically used at the launch of a new product. When there is a high level of consumer interest in the product and no competition for your business.
Skimming Pricing
74
Entails assessing variable costs based on who you buy, your goods or services from and when. One of the key components of this strategy which takes supply and demand into account, is pricing flexibility.
Dynamic Pricing
75
It uses psychological tricks on people to increase sales.
Psychological Pricing
76
An attempt by a business to draw in new customers by selling products for less that what it actually costs to produce them.
Loss Leader Pricing
77
A pricing technique when a product's selling price is double its cost. This approach is well-liked in both retail and online sales since it gives the vendor sizable profit margin and is seen as fair by the buyer.
Keystone Pricing
78
A psychological marketing tactic that pits a more expensive product against a less expensive one. The goal of this pricing presentation style is to increase the appeal of the less expensive goods or services.
Anchor Pricing
79
A pricing structure in which a company sets a total cost for several pieces of the same product.
Multiple Pricing
80
The pricing that a product's producer advises merchants to use when selling it.
Manufacturer Suggested Pricing
81
A marketing term that describes classifying potential customers into segments or groups based on shared needs and how they react to a marketing initiative.
Market Segmentation
82
Criteria of Market Segmentation
Homogeneity
Distinction
Reaction
83
14 Types of Pricing Strategy
1. Cost Plus Pricing
2. Competition-based Pricing
3. Value-based Pricing
4. Penetration Pricing
5. Economy Pricing
6. Premium Pricing
7. Skimming Pricing
8. Dynamic Pricing
9. Psychological Pricing
10. Loss Leader Pricing
11. Keystone Pricing
12. Anchor Pricing
13. Multiple Pricing
14. Manufacturer Suggested Pricing
84
Common needs within a segment
Homogeneity
85
Being unique from other groups
Distinction
86
Similar response to market
Reaction
87
5 Types of Market Segmentation
Demographic Segmentation
Firmographic Segmentation
Geographical Segmentation
Behavioral Segmentation
Psychographic Segmentation
88
It entails segmenting the market according to the age, income, gender, race, education, and occupation of the target market's customer.
Demographic Segmentation
89
This approach examines companies, taking into account things like number of workers, clients, location, or yearly income.
Firmographic Segmentation
90
Dividing the market according to geographical parameters including nation, area, size of city, climate, and population density.
Geographical Segmentation
91
Dividing the market according to consumer behavior, such as their brand loyalty, usage patterns, and rewards preferences.
Behavioral Segmentation
92
Dividing the market according to consumer behavior patterns, values, attitudes, interests, lifestyle, and personality attributes.
Psychographic Segmentation
93
Industrial Economics also gives insights into how firms organise their activities, as well as considering their __________.
Motivation
94
is the study of how society manages its
scarce resources. In most societies, resources are allocated not by an all-powerful dictator but through the combined choices of millions of households and firms.
Economics
95
The branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households.
Microeconomics
96
The field of economics that studies the behavior of the aggregate economy. It examines economy-wide phenomena such as changes in unemployment, national income, rate of growth, gross domestic product, inflation and price levels.
Macroeconomics
97
A partnership where all partners have equal management authority and liability.
General Partnership
98
Kinds of Partnership
General Partnership
Limited Partnership
99
A partnership where some partners have limited liability.
Limited Partnership
100
Various forms of Cooperatives
Consumer Cooperatives
Worker Cooperatives
Producer Cooperatives
101
It involves pricing different versions of the product to attract consumers who are the most interested in each version.
Menu Pricing
102
Examine consumer preferences for quality and price and assume that all consumers prefer higher quality and lower prices but they differ in their relative valuations.
Quality-Dependent Prices
103
The monopolist has the ability to choose both the quality and price of their product. If menu pricing is optimal, the monopolist will offer two different qualities. The cost of producing higher quality is more expensive.
Distortion of Quality
104
Products are introduced on the market at successive dates and at declining prices.
Time-Dependent Prices
105
An act done by the firm in which they set their products' prices high initially, then gradually decrease it over time.
Inter Temporal Price Discrimination
106
Is a form of price discrimination where one good is called the base good, is tied to a second good called the variable good.
Tying
107
Type of Bundling
Pure Bundling
Mixed Bundling
Contractual
Technical
108
Classification of Advertising
Persuasive Advertising
Informative Advertising
Complementary Advertising
109
Views in Advertising
Partial View
Adverse View
110
Categories of Good Advertising
Search Goods
Experience Goods
111
Categories of Persuasive Advertising
Ethos
Logos
Pathos
112
Are commodities or products for which consumers can easily evaluate attributes before making a purchase or consuming them.
Search Goods
113
Are products where characteristics such as quality or price are difficult to observe in advance. Their true value becomes apparent only after consumption.
Experience Goods
114
It focuses on messaging that establishes credibility and trustworthiness of others.
Ethos
115
A persuasive ads that uses logic, reason, and rationality to persuade the audience.
Logos
116
It appeal to the emotions and feelings. It aims to evoke emotional responses from the audience.
Pathos
117
The process of determining a product/service's vale before making a choice.
Pricing
118
It assist the business in setting that balance market and consumer demand with the goal of maximizing profits and shareholder vaue.
Pricing Strategy
119
Is a precise amount spent on a good/service.
Net Price
120
means that society has limited resources and therefore cannot produce all the goods and services people wish to have.
Scarcity
121
Refers to the tendency of consumer to choose the same products overtime for reasons other than the fundamental attributes of those products.
Consumer Inertia
122
Are the cost that consumers incur when they change from one product, service, or brand to another.
Switching Cost
123
Refers to the practice of business actively targeting and enticing customers away from their competitors.
Consumer Poaching
124
Are those who lack complete knowledge about the prices and attributes of competing products.
Uninformed Consumer
125
The effort, time, and resources requires for consumers to gather information about products or services.
Search Cost
126
Means that any point in time, prices for essentially the same products are different.
Price Dispersion
127
Factors influencing consumer Inertia
Switching Cost
Search Cost
Uninformed Consumer
Consumer Poaching
128
Types of Dispersion
Spatial Price Dispersion
Temporal Price Dispersion
129
Occurs in a situation where multiple sellers contemporaneously offer homogenous products at different prices.
Spatial Price Dispersion
130
Measured by comparing how stores' prices are ranked over time.
Temporal Price Dispersion
131
Is a pricing strategy that charges consumers different prices for identical goods or services based on what the seller believes they can get the customer to agree to.
Price Discrimination
