Markets

Question 1

What is a market?

Answer 1

A market is any place that buyers and sellers will come together to exchange goods or services. There will normally be an exchange of money at a set price.

Question 2

What is a nature of the market?

Answer 2

Today, markets take numerous forms e.g. local, national, physical or electronic.

Question 3

What is competition?

Answer 3

The number of businesses operating in the same market. They are competinting to sell the same product to a similar target market.

Question 4

What are the types of markets?

Answer 4

Local/Global
Mass/Niche
Trade/Consumer
Product/Service
Seasonal

Question 5

What are ways businesses compete?

Answer 5

New product development
Changing/improving existing products
Promotions
Changing prices
Improving distribution networks including online sales
Quality assurance
Improved customer service – staff training

Question 6

What are the characteristics of mass markets?

Answer 6

A product is targeted at a wide range of people
The market is not segmented
Products appeal to a wide range of customers
Products are widely available through a range of markets
Mass media is used to advertise the products

Question 7

What are the characteristics of niche marktets?

Answer 7

Identifying small, currently unsatisfied, gaps in the market
The target market is well defined with distinct characteristics
Promotional activities will be targeted at just a small subsection of the whole market
Can often charge higher prices

Question 8

What are trade markets?

Answer 8

It is when businesses sell to other businesses

Question 9

What is a consumer market?

Answer 9

It is when businesses sell to the public

Question 10

What is market size?

Answer 10

It is the total volume or value of the amount of sales in a market.
Number of units sold x price

Question 11

What is market share?

Answer 11

This is the proportion of total market sales that a firm has
Sales of one firm/Total market sales x 100

Question 12

What are market trends?

Answer 12

These are over changes in the market?

Question 13

What is market segmentation?

Answer 13

It is when the market is split into subgroups of consumers with similar characteristics

Question 14

What are some methods of market segmentation?

Answer 14

Demographic
Income
Behavioral
Geographic

Question 15

What are the subgroups for market segmentation?

Answer 15

Age
Gender
Race
Level of education
Religion
Family size
Stage in life

Question 16

What are the impacts of market segmentation for business and customers?

Answer 16

Advertising can be targeted
The most and least profitable customers can be identified
Least profitable markets can be identified
It easier to identify and launch new products

Question 17

What are market structure?

Answer 17

It is the number of firms in a market within an industry and the way in which those businesses behave t

Question 18

What is Perfect competition?
What are the characteristics ?

Answer 18

Perfect competition is a situation where there is a large number of small businesses producing almost the exact same product (HOMOGENEOUS).

Little - to no Barriers to entry

Perfect knowledge of goods and services

No interrelatedness

Price-takers

Question 19

What is Monopolistic Competition ?
What are the characteristics ?

Answer 19

Monopolistic competition is a situation where there is a large number of RELATIVELY small businesses and there a few entry barriers similar to perfect competition.

Branding

Low barriers to entry

Limited Knowledge

Price-Makers

Question 20

What is Oligopoly?
What are the characteristics ?

Answer 20

Oligopoly is where there are many firms, but only a few dominate the market. An example would be petrol, beer and detergent.

High entry barriers(Legal,Money)

Very limited Knowledge

high interrelatedness

Price-Makers

Question 21

What is a monopoly?
What are the characteristics ?

Answer 21

Pure) Monopoly occurs when one business has TOTAL control over a market and is the only seller of the product. An example would be Royal mail or British gas. A legal monopolist is deemed a monopolist if it owns at least 25% of the market.

Near impossible entry barriers

Price-Makers

Question 22

What is collusion?

Answer 22

Collaboration Secretly to increase prices.(Illegal )

Question 23

What is demand?

Answer 23

The quantity of goods and services that will be bought at any time given price over a period of time

Question 24

What is supply?

Answer 24

Supply is the quantity of goods and or services produce to the market at a given price and time

Question 25

What is equilibrium ?

Answer 25

When demand and supply meet at an optimal Price and quantity .

Question 26

What factors affects Demand ?

Answer 26

Popularity
Price
Income elasticity

Question 27

What factors affect Supply?

Answer 27

Changes to cost of production
Tech
Legal
Price of other goods

Question 28

What makes a Demand curve shift?

Answer 28

Amount demanded increases or decreases for all prices

Question 29

What makes a Supply curve shift?

Answer 29

A supply curve shifts due to changes in factors such as production costs, technology, government policies, expectations, or the number of suppliers in the market.

Question 30

What is PED,YED?

Answer 30

PED(Price elasticity of demand) is how responsive demand is when price increases.

YED(Income elasticity of demand) is how responsive demand is when income increases.

Question 31

What is a Normal good, Luxury good , Inferior good?

Answer 31

Normal good(Goods that will be demanded more as income increases)(DVDS)

Inferior good(goods that will be demanded less as income increases)
(Lidl, Aldi, saver menu)

Luxury good(Goods that will be demanded as income increases)(sports cars)