Key terms

Question 1

Define market

Answer 1

Any place where buyers and sellers meet to exchange goods or services

Question 2

Define competition

Answer 2

Refers to the number of businesses in a market

Question 3

Define mass market

Answer 3

Where a business sells to the whole market and markets the product to all consumers in the same way

Question 4

Define niche market

Answer 4

A small segment of a market that offers specialist products or services to a unique group of customers . It is the opposite of
mass marketing . May have less competition .

Question 5

Define market segmentation

Answer 5

a process of subdividing a market into identifiable subgroups that have similar needs, wants or characteristics and providing them with goods or services that meet their needs and wants

Question 6

Define monopoly

Answer 6

A single business dominates the market (it could be a pure monopoly with 100% market share or, most likely, a business with 25% or more market share, which could be regarded as a monopoly according to UK/EU competition authorities)
-high barriers to entry
-price makers
-high economies of scale

Question 7

Define oligopoly

Answer 7

a few large businesses dominate the market in terms of sales revenue/market share as well as which there may be many small firms. they engage in non-price competition such as banding and advertising
-high barriers to entry
-price makes
-high economies of scale

Question 8

Define monopolistic competition

Answer 8

Many relatively small businesses, no dominant business
-few barriers to entry
-similar products with some differentiation
- little control over prices but essentially might be price takers

Question 9

Define perfect competition

Answer 9

A market in which many small firms produce virtually identical products at similar prices with the ability to enter and leave the market freely
-Low barriers to entry
-There are a large number of small businesses competing - no one business is large enough to influence the activities of others

Question 10

Define consumer protection

Answer 10

Laws that prevent harm such as goods not being fit for purpose or not of merchantable quality.

Question 11

Define demand

Answer 11

The quantity of goods/services that consumers are willing and able to buy at a given price, at a given time

Question 12

Define supply

Answer 12

The quantity of goods/services that producers are willing and able to supply to the market at a given price, at a given time

Question 13

Define price inelastic

Answer 13

between 0-1
-where a change in price results in a smaller % change in quantity demanded

Question 14

Define price elastic

Answer 14

greater than 1
-where the quantity demanded rises or falls by a larger percentage than the price change

Question 15

Define income elastic

Answer 15

-Income elasticity is greater than 1
-Where the quantity demanded falls by a larger percentage than the income change

Question 16

Define income inelastic

Answer 16

Income elasticity is between 0 and 1
-where the quantity demanded rises or falls by a smaller percentage than the income change

Question 17

Define inferior goods

Answer 17

A product that has negative income elasticity. As incomes decrease, demand increases and vice versa

Question 18

Define normal goods

Answer 18

A product that has positive income elasticity. As incomes increase, demand increases and vice versa

Question 19

Define Luxury goods

Answer 19

Goods for which demand increases significantly when incomes increase, and vice versa. Positive income elasticity that is greater than one

Question 20

Define Market research

Answer 20

The process of gathering primary and secondary data on the buying habits, lifestyles, usage and attitudes of actual and potential customers

Question 21

Define primary research include examples

Answer 21

gathers first-hand information that doesn’t already exist. It is directly relevant to the needs of the business, it is for a specific purpose. Examples include questionnaires, interviews, focus groups, consumer pannels and customer surveys

Question 22

Define Secondary research

Answer 22

Involves the use of previously collected information gathered for a different purpose, that already exists. It can be internal or external and is adapted for its use. examples include government reports, official publications and analysis of sales figures

Question 23

Define sampling

Answer 23

when researchers take a selection of the population who are representative of the whole population. For example random and quota sampling

Question 24

Define quota sampling