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1 Business Studies > Market forces > Flashcards

Market forces Flashcards

1
Q

What are market forces often referred to as?

A

Supply and demand

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2
Q

What is demand?

A

The amount of goods/services that customers are willing and able to buy at a given price

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3
Q

What is supply?

A

The amount of goods/services that sellers are willing and able to sell at a given price

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4
Q

What happens to demand as price increases?

A

Demand decreases

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5
Q

What is the equilibrium price?

A

The situation in a market where demand is equal to the supply

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6
Q

What is the effect of excessive demand?

A

There will be an increase in price due to the short supply before suppliers increase supply to capitalize on demand

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7
Q

What is the effect on excessive supply?

A

It will mean that either a decrease in price will occur or a decrease in demand

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8
Q

What happens to the demand/supply curve following a change in price?

A

The existing customers move along the curve

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9
Q

What happens to the demand/supply curve following a change in a factor which is not price?

A

The curve will shift; left for a negative factor and right for a positive factor

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10
Q

What are the factors which affect demand?

A

Price, income, wealth, advertising, taste and fashion, demographic change, government action, price of substitutes, price of compliments

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11
Q

What is wealth?

A

The combined value of assets

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12
Q

What is income?

A

The financial gain in a household

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13
Q

What is price?

A

The amount customers are willing and able to pay

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14
Q

What is cost?

A

The amount a business spends making a product

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15
Q

What is elastic demand?

A

When quantity is sensitive to a change in price

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16
Q

Elasticity of demand is …

A

The measure of how sensitive quantity demand is to a change in price

17
Q

What is inelastic demand?

A

When quantity demand is insensitive to a change in price

18
Q

What causes goods to be inelastic?

A

If they are essential goods

19
Q

What causes goods to be elastic?

A

If they have lots of substitutes or are deemed a luxury

20
Q

Globalisation is …

A

The process of integration and interdependence of national economies

21
Q

What are the main factors which have caused globalization?

A

An increased number of transactions
Increased capital for investment
Increased movement of people
Increase in availability of knowledge

22
Q

Factors which sped up globalization?

A

Barriers between countries decreased
Communication improved
Huge economies of scale possible

23
Q

Why are some multinationals moving to developing countries?

A

To take advantage of low wages, fewer legal constraints, government grants and the opportunity to sell in new markets

24
Q

What are the advantages of globalization?

A

Incoming company brings investment and jobs
News and ideas spread around the world
LDC can use foreign currency for imports

25
Q

What are the disadvantages of globalization?

A

Benefits mainly to developed countries
Lack of clear legal framework
Multinational companies can impose ideas, morals on local populations
Jobs in developed countries move to LDCs

26
Q

Factors which have increased imports?

A

Reduced trade restrictions
Lower cost of production abroad
Ease of transportation

27
Q

What is a multinational company?

A

A business with operations in multiple countries

28
Q

What is an international company?

A

A company which has operations in one country but imports and exports abroad

29
Q

What is a strategy?

A

A plan of action

30
Q

What is a global strategy?

A

A plan of action of a company to operate and compete in the global market, whilst achieving its aims.

31
Q

A brand is …

A

A distinctive product offering using a logo, symbol, name, design, packaging or combination thereof to distinguish it from its competitors

32
Q

A global brand is?

A

A brand is recognised throughout most of the world

1 Business Studies (9 decks)

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