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Business A Level > Miss Blackwell Half Term 1 > Flashcards

Miss Blackwell Half Term 1 Flashcards

1
Q

Demand

A

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

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2
Q

Supply

A

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

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3
Q

Equilibrium price

A

Situation in a market where demand is equal to supply

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4
Q

When there is excess demand in a market

A 
Price = increase
Supply = increase
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5
Q

When there is excess supply in a market

A

Price = decrease

Quantity demanded = increase

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6
Q

What are market forces

A

Supply and demand factors

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7
Q

Factors of demand

A
  • Price
  • Income
  • Wealth
  • Advertising/PR
  • Taste and fashion
  • Demographic change
  • Government action
  • Price of other products
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8
Q

Income

A

Money received from employment

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9
Q

Wealth

A

Value of a persons total assets

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10
Q

Advertising

A

Exposing

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11
Q

Taste and fashion

A

General trends

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12
Q

Demographic

A

Characteristics of a human population

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13
Q

Government action examples

A

Tax

Subsidies

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14
Q

Tax

A

An amount of money paid to the government

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15
Q

Subsidy

A

Payment from government to business to incentivise supply of a product or service

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16
Q

Substitutes

A

An alternative product serving the same purpose

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17
Q

Complement

A

A product bought in conjunction with another

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18
Q

Supply factors

A
  • Price
  • Costs
  • Taxes
  • Subsidies
  • Price of other products
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19
Q

Elasticity of demand

A

Measure how sensitive QD is to a change in price

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20
Q

Elastic

A

Demand is sensitive to a change in price (luxuries)

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21
Q

Inelastic

A

Demand is not sensitive to a change in price (necessities-petrol)

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22
Q

Competition

A

Rivalry amongst sellers

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23
Q

Market

A

Situation where buyers and sellers are in contact

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24
Q

Physical markets with advantage

A

Shops

Provide personalisation

25
Q

Non physical markets and advantage

A

E commerce

Provide convenience

26
Q

Market price

A

Price range/ typical price of a product in a market at which consumers are prepared to pay

27
Q

Mark up

A

Profit for one item

28
Q

Revenue

A

Money made from sales

29
Q

Competitive market

A

Market characterised by many sellers

30
Q

Competitive market characteristics

A

Many firms
Usually low prices
Eg foreign exchange

31
Q

Monopoly

A

Market dominated by one seller (25%)

32
Q

Monopoly characteristics

A

Few firms
Often high prices (although dominating firms may achieve economies of scale)
Eg supermarkets

33
Q

Oligopoly

A

Market dominated by a few firms
Eg mobile phone operators
Non price differences
Similar and quite high prices (collusion)

34
Q

Collusion

A

When rival companies cooperate for their mutual benefit

35
Q

Monopolistic competition

A

A market structure with many competitive firms, each of whom supplies a slightly differentiated product at a similar price

36
Q

Monopolistic competition example

A

Taxi businesses

37
Q

Market size

A

The collective value of goods and services that buyers purchase

38
Q

Market growth

A

The percentage growth of the size of the market

Measured over a specific time period

39
Q

Market share

A

The percentage of total sales that a business has in a specified market

40
Q

Ways to increase market share

A
  • be aware of and meet customer demands
  • sell more (advertise)
  • find out why you’ve lost customers
  • have clear marketing plan
  • use variety of marketing techniques (pricing, advertising, promotion)
  • merge/acquire competitor
41
Q

Barriers to entry

A

Factors that would prevent a firm from entering and/or competing in a market

42
Q

Examples of barriers to entry

A
  • Large start up costs
  • Need to break customer loyalties
  • Inability to gain economies of scale
  • Price war from existing businesses
  • Legal restriction such as patent
43
Q

Patent

A

Someone can’t copy your idea/design

44
Q

Market power

A

Ability of a firm to influence or control the terms and conditions on which foods are bought and sold

45
Q

Effect of market power on barriers to entry

A

Barriers to entry decrease or increase as market power does

Eg monopoly would have lots of power thus a high barrier to entry

46
Q

Barriers to exit

A

Factors preventing a firm from leaving a market

47
Q

Examples of barriers to exit

A
  • Redundancy payments
  • Difficulty selling off capital
  • Contracts with suppliers
48
Q

Market dominance

A

A measure of market share compared to competitors

49
Q

2 examples of external growth

A

Merger

Acquisition

50
Q

Merger

A

Where 2 companies join together and form a larger business

51
Q

Acquisition

A

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

52
Q

Disadvantages of external growth

A
  • Diseconomies of scale due to size (communication problems)
  • Redundancies
  • Higher prices (customers)
53
Q

Regulating body in UK

A

CMA (competition markets authority)

54
Q

What can the CMA investigate and stop

A

Dominance
Anti-competitive practices
Mergers
Acquisitions

55
Q

What other regulating body has power to stop markers and acquisitions in the UK

A

European regulating body

56
Q

What the CMA does

A

Work to promote competition and make markets operate to benefit consumers, businesses and the economy equally

57
Q

Responsibilities of the CMA

A
  • Investigate mergers that may restrict competition
  • Conduct market investigations where anti-competitiveness may be occurring
  • Investigate breaches of UK or EU prohibitions against anti-competitive agreements and abuse of dominant positions
58
Q

Sanctions the CMA can enforce

A
  • Fine business up to 10% of turnover
  • Customers and competitions can sue, if anti-competitive
  • Individuals can be disqualified from being company director
  • Fine individual (director) if they fail to comply when info is requested in investigation
59
Q

What do separate regulating bodies exist for

A

Former nationalised industries (gas, electricity, water, railways, telecoms)

Business A Level (16 decks)

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