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Miss Blackwell Flashcards

1
Q

demand

A

the amount of a good or service that customers are willing to buy at any given price

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2
Q

supply

A

the amount of a good or service that sellers are willing and able to sell at any given price

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3
Q

equilibrium

A

the situation in a market where demand is equal to supply (both parties are happy. In theory, customers can buy what they want and shops have no unsold stock

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4
Q

supply curve

A

up to the sky (going up)

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5
Q

demand curve

A

down to dirt (going downwards)

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6
Q

income (positive)

A

if there is a negative impact, it shifts to the right

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7
Q

income (negative)

A

if there is a negative impact, it shifts to the left

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8
Q

price

A

the amount customers are willing and able to pay

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9
Q

income (increases)

A

when income increases the demand goes up

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10
Q

income (decreases)

A

when income decreases demand goes down

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11
Q

positive influences

A

demand curve moves to the right

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12
Q

negative influence

A

demand curve moves to the left

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13
Q

what causes demand shifts?

A
  1. income
  2. population
  3. price of substitutes
  4. price of complements
  5. tastes
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14
Q

increase in demand =

A

increase of quantity demand of every given price

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15
Q

wealth

demand factors

A

if someones wealth increases then they will be willing to spend more money
-this will have a positive impact demand and the curve will move to the right

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16
Q

advertising, promotional offers and public relations

demand factors

A

methods of introducing the product or service to the customer and encourage them to buy it.
Eg. wowcher

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17
Q

taste and fashion

demand factors

A

what the customers like and dislike

Eg. urban outfitters target specific likes and dislikes

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18
Q 
demographic changes
(demand factors)
A

the size and composition of a population or characteristics of human population groups
Eg. Superdry- younger people are starting to wear their clothes not 15-18 year olds

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19
Q

government action

demand factors

A

to encourage a change they want to see
Eg. Nike- benefit if more people exercised
demand curve will shift to the right due to a positive impact

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20
Q

price of other products
(demand factors)
(substitutes)

A
  1. different products used for the same function
  2. electricity and oil to heat a house
  3. positive impact for electricity companies resulting in a shift to the right for them
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21
Q

price of other products
(demand factors)
(complements)

A
  1. products bought together for demand (one helps the other)
  2. printer and ink
  3. positive impact on demand of ink meaning that the curve will move right
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22
Q

supply factors

price

A

price

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23
Q

supply factors

costs

A

costs

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24
Q

supply factors

taxes

A

the government will put a tax in order to raise revenue, or discourage the use of certain products.
Eg. sugar tax
shifts to the left

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25
supply factors | subsidies
may offer money to the company if it is beneficial for the economy shifts to the right
26
supply factors | price of other products
competitive supply | shits to the right
27
demand increase
the result is a new equilibrium. When demand increases the equilibrium moves with a higher quantity being demanded and supplied as the price is highered
28
supply increase
the new equilibrium means a decrease in price as there is more supply. reduce price to get consumers to buy more as there is a higher supply
29
elasticity
a measure of demand to see how sensitive quantity demanded is to a change in price
30
inelasticity
a measure to see how insensitive demand id to a change in price
31
Elastic demand curve
Flatter
32
In elastic demand curve
Steeper
33
Competition
Rivalry amongst sellers
34
Market
Any situation where buyers and sellers are in contact about price
35
Non physical | Online
Tangible items
36
Non physical | Digital
Non tangible, downloadable
37
Market price
Although there is no such thing as the market price in the sense of a single price for products, there is a price range in a market which customers are willing to pay
38
Mark up
Difference between the cost of producing an item and the price of which it’s sold at - if market price rises so does the mark up - if the market price falls a business must lower its costs or accept a lower mark up for the products
39
Economies of scale
When unit costs fall output rises
40
Monopoly
One business who dominates the whole market. In reality, the CMA describe a monopoly as any business with a market share of over 25% Eg Tesco
41
Monopoly characteristics
- high prices - not much choice for customers - one business - barriers to entery
42
Characteristics of barriers to entery
- need capital to enter - loyal customers - smaller business pushed out by monopolys
43
Oligopoly
Where a business is dominated by many firms | Eg network providers
44
Revenue
Amount you sell (sales)
45
Competitive market
A lot of similar businesses in one specific market competing for customers as they sell similar products
46
Profit
Revenue-costs
47
Oligopoly characteristics
- similar and high prices - similar products - compete on non price differences - collusion - might force other firms out of the market
48
Collusion
Rival companies cooperate for their mutual benefit
49
Monopolistic companies
A market structure with many competing firms each of whom supplies a slightly differentiated product
50
Percentage change
(Change/original) x100
51
Market size
Collective value of the goods/services that buyers purchase
52
Market growth
Percentage change in the size of the market, measured over a specific period
53
Market share
Percentage of the total sales (by value) that a business has in a specific market Market share can fall whilst sales stay the same if the market is increasing
54
(Financial) why firms may choose to enter a market
- revenue - mark up - PROFIT
55
(Social) why firms may choose to enter a market
- more ethical - greater good - make enough profit to keep going
56
Barriers to entery
The factors that could prevent a firm from entering and competing in a market
57
Barriers to exit
Factors that could prevent a firm from leaving a market, even if it wants to
58
How to break barriers to entery
1. Large start up costs - machinery and premises 2. Breaking customer loyalty 3. Inability to gain economy of scale 4. Possibility that an existing business will start a price war 5. Legal restrictions - patents
59
How to compete barriers to exit
1. Liquidise stock at cheaper price - clearance sales 2. Difficulty of selling any capital 3. Contracts with suppliers - legal challenges if contracts aren’t honoured
60
Market dominance
A measure of market share compared to competitors
61
Market power
The ability of a firm to influence or control the terms and conditions (ie higher prices) on which goods are bought and sold
62
Merger
Two companies join together to form a new larger business
63
Acquisition/Takeover
Control of another company is achieved by buying a majority of its shares
64
Benefits of merger/acquisitions
- economies of scale - gain new management with different skills - result in increase in market share/power

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