Unit 2 Flashcards
What is Organic growth
It occurs when a business sells more of its products.
What is External growth
It occurs when a business joins together with another business
What is a merger
It occurs when two or more businesses join together to form a new business
A takeover occurs when …
One business gains control of another
A franchise occurs when …
One business (a franchisor) sells the rights to its name and products to another (a franchisee)
Economies of scale occurs when…
The cost per unit falls as a business expands
Diseconomies of scale occurs when
The cost per unit increases as a business expands
A flotation occurs when…
A private limited company (ltd) becomes a public limited company (plc) and has its shares listed on the stock exchange
The stock exchange is …
A market for shares of public limited companies. Large number of shares are being bought and sold all the time
A market leader is
the biggest firm in a market, eg it had the largest market share
Business ethics refers to …
Whether a business decision is seen as morally right or wrong. An ethical decision is made if what you think is right
Protectionist measures are
Policies that governments use to protect their own businesses against foreign competition
An import is
A product bought from abroad
A quota is
A limit on the number of foreign goods imported into a country
A tariff is
A tax on foreign goods imported into a company
