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Business Conponant 1 > Markets > Flashcards

Markets Flashcards

1
Q

Define the term market?

A

a place where buyers and sellers meet to exchange goods/ services

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2
Q

Define the term monopoly?

A

Where there is only one dominant business or single producer within a market

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3
Q

Define the term oligopoly?

A

Where there are many firms in a market but it is dominated by a few large competitors

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4
Q

Define the term monopolistic competition?

A

where a large number of relatively small businesses are in competition with one another but they all sell slightly different products

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5
Q

Define perfect competition?

A

large number of businesses competing each of whom produce a low percentage of total market output and cant affect the prevailing market price

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6
Q

State two features of a monopoly

A

Price maker,
Barriers to entry,
Unfair competition,
Tend to be heavily regulated.

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7
Q

State two features of an oligopoly?

A

Differentiated products
Stable pricing
Barriers to entry

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8
Q

State two features monopolistic competition?

A

Business has some control over the price
Few/ low barriers to entry
Products are similar but not exact substitutes

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9
Q

State two features of perfect competition?

A

Infinite number of individual buyers
Products can be easily substituted
No market leaders or price leaders
perfect knowledge
price takers

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10
Q

Define the term barriers to entry?

A

make it difficult or impossible for new competitors to entre the market

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11
Q

State three examples of barriers to entry?

A

Strong brand identity
High capital
economies of sale
access the factors of production
access of distribution networks
behaviour of existing firms

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12
Q

Define the term demand?

A

The amount of good or service that a customer is willing and able to purchase at a given price with a given time period

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13
Q

Define the term supply?

A

amount of goods or services sellers are able and willing to provide at time at a given price

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14
Q

Define price equilibrium?

A

when quantity demanded is equal to quantity supplied

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15
Q

State three factors which can affect demand for a product/service?

A

price
income
interest rates
change in the price of substitutes
change in tastes/fashions
change in price of complements
change in legislation

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16
Q

state three factors that will effect the supply of products?

A

price
cost of production
VAT/ Corporation tax
subsidies
the weather
improvement in technology

17
Q

What would happen to the equilibrium price if there was an increase in demand?

A

increase

18
Q

What would happen to the equilibrium price if there was a decrease in demand?

A

decrease

19
Q

What would happen to equilibrium price if there was an increase in supply?

A

fall/ decrease

20
Q

what would happen to the equilibrium price if there was a decrease in supply?

A

increase

21
Q

Define the term price elasticity of demand?

A

measures the responsiveness of a change in demand for a good/ service that results in a change in price of that product.

22
Q

Define the term price elastic?

A

a change in price will lead to a more than proportionate change in demand.

23
Q

Define the term price inelastic?

A

a change in price will lead to a less than proportional change in quantity demanded

24
Q

Is this PED price elastic or inelastic? = -1.5

A

elastic

25
Q

Is the PED price elastic or inelastic? =-0.5

A

inelastic

26
Q

Is PED price inelastic or price elastic? = -6

A

elastic

27
Q

Define the term income elasticity of demand?

A

measures the change in demand for a good or service that has been caused by a change in peoples income?

28
Q

Define the term inferior good?

A

goods that have a negative income elasticity of demand eg. supermarket own food brand

29
Q

Define the term normal good?

A

normal goods have positive income elasticity of demand eg. cars furniture

30
Q

Define the term luxury good?

A

are more sensative to changes in real income and as people get more money they buy more of these products eg. luxury clothes

31
Q

State two reasons consumers need protection from businesses

A

Profit motive,
unsafe or defective products
unfair advertising/ misleading information
pressurised sales tactics
online buying can be misleading
globalisation
description of goods
scientific advances

32
Q

State the role of ombudsman

A

investigate complaints made by citizens about businesses

33
Q

State the role of the CMA?

A

to investigate takeovers, mergers, anti-competitive practices
conduct market studies
bring criminal proceedings against people

Business Conponant 1 (6 decks)

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