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business > Miss Blackwell > Flashcards

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
Q

supply factors

subsidies

A

may offer money to the company if it is beneficial for the economy
shifts to the right

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26
Q

supply factors

price of other products

A

competitive supply

shits to the right

27
Q

demand increase

A

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
Q

supply increase

A

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
Q

elasticity

A

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

30
Q

inelasticity

A

a measure to see how insensitive demand id to a change in price

31
Q

Elastic demand curve

A

Flatter

32
Q

In elastic demand curve

A

Steeper

33
Q

Competition

A

Rivalry amongst sellers

34
Q

Market

A

Any situation where buyers and sellers are in contact about price

35
Q

Non physical

Online

A

Tangible items

36
Q

Non physical

Digital

A

Non tangible, downloadable

37
Q

Market price

A

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
Q

Mark up

A

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
Q

Economies of scale

A

When unit costs fall output rises

40
Q

Monopoly

A

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
Q

Monopoly characteristics

A
  • high prices
  • not much choice for customers
  • one business
  • barriers to entery
42
Q

Characteristics of barriers to entery

A
  • need capital to enter
  • loyal customers
  • smaller business pushed out by monopolys
43
Q

Oligopoly

A

Where a business is dominated by many firms

Eg network providers

44
Q

Revenue

A

Amount you sell (sales)

45
Q

Competitive market

A

A lot of similar businesses in one specific market competing for customers as they sell similar products

46
Q

Profit

A

Revenue-costs

47
Q

Oligopoly characteristics

A
  • similar and high prices
  • similar products
  • compete on non price differences
  • collusion
  • might force other firms out of the market
48
Q

Collusion

A

Rival companies cooperate for their mutual benefit

49
Q

Monopolistic companies

A

A market structure with many competing firms each of whom supplies a slightly differentiated product

50
Q

Percentage change

A

(Change/original) x100

51
Q

Market size

A

Collective value of the goods/services that buyers purchase

52
Q

Market growth

A

Percentage change in the size of the market, measured over a specific period

53
Q

Market share

A

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
Q

(Financial) why firms may choose to enter a market

A
  • revenue
  • mark up
  • PROFIT
55
Q

(Social) why firms may choose to enter a market

A
  • more ethical
  • greater good
  • make enough profit to keep going
56
Q

Barriers to entery

A

The factors that could prevent a firm from entering and competing in a market

57
Q

Barriers to exit

A

Factors that could prevent a firm from leaving a market, even if it wants to

58
Q

How to break barriers to entery

A
  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
Q

How to compete barriers to exit

A
  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
Q

Market dominance

A

A measure of market share compared to competitors

61
Q

Market power

A

The ability of a firm to influence or control the terms and conditions (ie higher prices) on which goods are bought and sold

62
Q

Merger

A

Two companies join together to form a new larger business

63
Q

Acquisition/Takeover

A

Control of another company is achieved by buying a majority of its shares

64
Q

Benefits of merger/acquisitions

A
  • economies of scale
  • gain new management with different skills
  • result in increase in market share/power

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