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3rd 2 > Industrial > Flashcards

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

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2
Q

Elements of Industrial Economics

A

Descriptive
Analytical

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3
Q

Is concerned with the information
content of the subject.

A

Descriptive element

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4
Q

Is concerned with the business policy and decision-making.

A

Analytical element

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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

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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

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7
Q

Is a group of firms producing closely
substitute goods for a common group of buyers.

A

Industry

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8
Q

Is defined as a closely interrelated group of sellers and buyers for a commodity.

A

Market

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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

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10
Q

Types of Firm

A

Sole Proprietorship
Partnership
Limited Liability Company (LLC)
Corporation
Non-profit Organization
Cooperative

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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

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12
Q

Is a business owned and operated by two or more individuals who share profits, losses, and responsibilities.

A

Partnership

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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

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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

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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

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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

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17
Q

Money or income that a company receives from selling its product.

A

Revenue

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18
Q

What results when a business subtracts its costs from its revenue.

A

Profit or Loss

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19
Q

Weighing the costs and benefits of an
action in order to maximize the net benefit from the action.

A

Cost-Benefit Analysis

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20
Q

Satisfaction realized from the consumption of a good or service or taking action.

A

Utility

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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

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22
Q

Payments that a business makes to acquire factors of production, such as labor, raw materials, and machinery.

A

Explicit Cost

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23
Q

The opportunity costs to business owners from using their resources in the business rather than in an alternative
opportunity.

A

Implicit Cost

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24
Q

Profit necessary to recover implicit costs and keep a business in operation.

A

Normal Profit

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25
Q

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)

A

Total Revenue

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26
Q

The change in total revenue when one
more (or additional) unit of an item is demanded.

A

Marginal Revenue

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27
Q

Is the cost of producing a specified number of output units.

A

Total Cost

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28
Q

Measures the change in total cost from
producing each additional unit of output.

A

Marginal Cost

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29
Q

Shows the type and amount of output
that results from a particular group of inputs when those inputs are combined in a certain way.

A

Production Function

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30
Q

A production time frame in which some factors of production are variable in amount and some are fixed.

A

Short Run

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31
Q

Factors of production that change in amount as the level of output changes.

A

Variable Factors

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32
Q

Costs of using variable factors.

A

Variable Costs

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33
Q

Factors of production that do not change in amount as the level of output changes.

A

Fixed Factors

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34
Q

Costs of using fixed factors.

A

Fixed Costs

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35
Q

A production time frame in which all factors of production are variable in amount.

A

Long Run

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36
Q

The cost of all fixed factors; does not
change as the level of output changes and must be paid even when output is zero.

A

Total Fixed Cost

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37
Q

The cost of all variable factors of
production; increases as the level of output increases but is zero when output is zero.

A

Total Variable Cost

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38
Q

The cost of acquiring and using all factors of production; total fixed cost plus total variable cost.

A

Total Cost

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39
Q

The cost per unit of output produced;
total cost divided by the number of units produced.

A

Average Total Cost

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40
Q

The change in total cost when one more
unit of output is produced.

A

Marginal Cost

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41
Q

Is the total expenditure for each level of
output in the long run.

A

Long-run Total Cost

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42
Q

measures the per unit cost in the long run

A

Long-run Average Cost

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43
Q

Measures the cost of producing an
additional unit of output in the long run.

A

Long-run Marginal Cost

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44
Q

Occur when the increasing size of
production, in the long run, causes the per unit cost of production to fall.

A

Economies of Scale

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45
Q

Occur when the increasing size of
production, in the long run, causes the per unit cost of production to rise.

A

Diseconomies of Scale

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46
Q

Occur in the range of production
levels in which long-run average total cost is constant.

A

Constant Returns to Scale

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47
Q

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.

A

Perfect Competition Market Structure

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48
Q

there is a single seller dominating the market, with no close substitutes for its product

A

Monopoly

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49
Q

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.

A

Monopolistic Competition

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50
Q

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.

A

Oligopoly

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51
Q

Is a place where parties can gather to
facilitate the exchange of goods and services.

A

Market

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52
Q

Is the ability of a business to set their
prices above a level that would exist in a highly competitive market.

A

Market Power

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53
Q

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.

A

Cost-Plus Pricing

54
Q

This appears when firms set a high initial price for a new product, and then they gradually lower the price as demand
decreases.

A

Price Skimming

55
Q

When firms release their new products at a low initial price to attract customers.

A

Penetration Pricing

56
Q

This involves offering multiple products or services together at a discounted price.

A

Bundling Pricing

57
Q

Involves setting prices based on the perception of the value of the product, rather than the actual cost of production.

A

Psychological Pricing

58
Q

Non-price Stategies

A

Physical Characteristics/Appearance
Location
Service Level
Advertising

59
Q

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.

A

Price Competition

60
Q

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.

A

Quantity Competition

61
Q

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.

A

Choice Modelling

62
Q

Happens when the price that consumers pay for a product or service is less than
the price they’re willing to pay.

A

Consumer Surplus

63
Q

Products are differentiated with each
other according to the individuals
preferences, taste, or subjective
perceptions

A

Horizontal Differentiation

64
Q

Several goods that are present can be ordered according to their objective quality from the highest to the lowest.

A

Vertical Differentiation

65
Q

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.

A

Pricing

66
Q

It assists the business in setting prices that balance market and consumer demand with the goal of maximizing profits and shareholder value.

A

Pricing Strategy

67
Q

Adds a fixed percentage to the manufacturing costs for each unit. This pricing technique is also known as “mark up pricing.”

A

Cost Plus Pricing

68
Q

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.

A

Competition-based Pricing

69
Q

Takes into account how much customers appreciate the services you offer and modify your prices accordingly.

A

Value-based Pricing

70
Q

Strives to attract clients by offering goods and services at a cheaper price than competitors. By encouraging brand identification and lotalty.

A

Penetration Pricing

71
Q

The goal is to convince the most cost-conscious consumers to buy the goods.

A

Economy Pricing

72
Q

Companies that demand high pricing do so because they have a unique brand or product that sets them apart from competitors.

A

Premium Pricing

73
Q

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.

A

Skimming Pricing

74
Q

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.

A

Dynamic Pricing

75
Q

It uses psychological tricks on people to increase sales.

A

Psychological Pricing

76
Q

An attempt by a business to draw in new customers by selling products for less that what it actually costs to produce them.

A

Loss Leader Pricing

77
Q

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.

A

Keystone Pricing

78
Q

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.

A

Anchor Pricing

79
Q

A pricing structure in which a company sets a total cost for several pieces of the same product.

A

Multiple Pricing

80
Q

The pricing that a product’s producer advises merchants to use when selling it.

A

Manufacturer Suggested Pricing

81
Q

A marketing term that describes classifying potential customers into segments or groups based on shared needs and how they react to a marketing initiative.

A

Market Segmentation

82
Q

Criteria of Market Segmentation

A

Homogeneity
Distinction
Reaction

83
Q

14 Types of Pricing Strategy

A
  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
Q

Common needs within a segment

A

Homogeneity

85
Q

Being unique from other groups

A

Distinction

86
Q

Similar response to market

A

Reaction

87
Q

5 Types of Market Segmentation

A

Demographic Segmentation
Firmographic Segmentation
Geographical Segmentation
Behavioral Segmentation
Psychographic Segmentation

88
Q

It entails segmenting the market according to the age, income, gender, race, education, and occupation of the target market’s customer.

A

Demographic Segmentation

89
Q

This approach examines companies, taking into account things like number of workers, clients, location, or yearly income.

A

Firmographic Segmentation

90
Q

Dividing the market according to geographical parameters including nation, area, size of city, climate, and population density.

A

Geographical Segmentation

91
Q

Dividing the market according to consumer behavior, such as their brand loyalty, usage patterns, and rewards preferences.

A

Behavioral Segmentation

92
Q

Dividing the market according to consumer behavior patterns, values, attitudes, interests, lifestyle, and personality attributes.

A

Psychographic Segmentation

93
Q

Industrial Economics also gives insights into how firms organise their activities, as well as considering their __________.

A

Motivation

94
Q

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.

A

Economics

95
Q

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.

A

Microeconomics

96
Q

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.

A

Macroeconomics

97
Q

A partnership where all partners have equal management authority and liability.

A

General Partnership

98
Q

Kinds of Partnership

A

General Partnership
Limited Partnership

99
Q

A partnership where some partners have limited liability.

A

Limited Partnership

100
Q

Various forms of Cooperatives

A

Consumer Cooperatives
Worker Cooperatives
Producer Cooperatives

101
Q

It involves pricing different versions of the product to attract consumers who are the most interested in each version.

A

Menu Pricing

102
Q

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.

A

Quality-Dependent Prices

103
Q

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.

A

Distortion of Quality

104
Q

Products are introduced on the market at successive dates and at declining prices.

A

Time-Dependent Prices

105
Q

An act done by the firm in which they set their products’ prices high initially, then gradually decrease it over time.

A

Inter Temporal Price Discrimination

106
Q

Is a form of price discrimination where one good is called the base good, is tied to a second good called the variable good.

A

Tying

107
Q

Type of Bundling

A

Pure Bundling
Mixed Bundling
Contractual
Technical

108
Q

Classification of Advertising

A

Persuasive Advertising
Informative Advertising
Complementary Advertising

109
Q

Views in Advertising

A

Partial View
Adverse View

110
Q

Categories of Good Advertising

A

Search Goods
Experience Goods

111
Q

Categories of Persuasive Advertising

A

Ethos
Logos
Pathos

112
Q

Are commodities or products for which consumers can easily evaluate attributes before making a purchase or consuming them.

A

Search Goods

113
Q

Are products where characteristics such as quality or price are difficult to observe in advance. Their true value becomes apparent only after consumption.

A

Experience Goods

114
Q

It focuses on messaging that establishes credibility and trustworthiness of others.

A

Ethos

115
Q

A persuasive ads that uses logic, reason, and rationality to persuade the audience.

A

Logos

116
Q

It appeal to the emotions and feelings. It aims to evoke emotional responses from the audience.

A

Pathos

117
Q

The process of determining a product/service’s vale before making a choice.

A

Pricing

118
Q

It assist the business in setting that balance market and consumer demand with the goal of maximizing profits and shareholder vaue.

A

Pricing Strategy

119
Q

Is a precise amount spent on a good/service.

A

Net Price

120
Q

means that society has limited resources and therefore cannot produce all the goods and services people wish to have.

A

Scarcity

121
Q

Refers to the tendency of consumer to choose the same products overtime for reasons other than the fundamental attributes of those products.

A

Consumer Inertia

122
Q

Are the cost that consumers incur when they change from one product, service, or brand to another.

A

Switching Cost

123
Q

Refers to the practice of business actively targeting and enticing customers away from their competitors.

A

Consumer Poaching

124
Q

Are those who lack complete knowledge about the prices and attributes of competing products.

A

Uninformed Consumer

125
Q

The effort, time, and resources requires for consumers to gather information about products or services.

A

Search Cost

126
Q

Means that any point in time, prices for essentially the same products are different.

A

Price Dispersion

127
Q

Factors influencing consumer Inertia

A

Switching Cost
Search Cost
Uninformed Consumer
Consumer Poaching

128
Q

Types of Dispersion

A

Spatial Price Dispersion
Temporal Price Dispersion

129
Q

Occurs in a situation where multiple sellers contemporaneously offer homogenous products at different prices.

A

Spatial Price Dispersion

130
Q

Measured by comparing how stores’ prices are ranked over time.

A

Temporal Price Dispersion

131
Q

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.

A

Price Discrimination

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