Economics Theme 2 Flashcards
Economies of scale
increases in capacity and output can reduce average costs
Internal economies of scale
When a business invests in larger-scale production
External economics
Cost reductions that are shared by a whole industry rather than a single firm, common when firms are concentrated in one location
Minimum efficient scale
The lowest level of output at which average or unit costs are minimised because the firm can make full use of EOS
Monopsony
Refers to a market with a single buyer eg Tesco and suppliers
Brand recognition
Measures the percentage of consumers who recognise a specific brand and associate it with a product features
Diseconomies of scale
Increase unit costs as a business grows eg communication issues or costs of co ordination
Corporate culture
Refers to the shared values and attitudes standards and beliefs that characteristics members of an organisation and define is nature
Asymmetric information
Occurs when one party to a transaction knows more than the other party
Viral marketing
Encourages the spread of information and opinions about a product or service from person to person; it can be particularly effective using online media
Micro marketing
Is a customised marketing strategy in which advertising efforts are focused on a small well defined group of customers
The long tail
Refers to proliferation of choices with increasing ability to match the precise niche market needs of individuals and small groups reducing the dominance of standard hits
Organic growth
Means the expansion of a single business by extending its own operations rather than by a merger or takeover, organic growth is slower but more secure
Inorganic growth
Refers to the expansion by merger or takeover bringing sudden increases in business size
Brand loyalty
Distinctive features that give a product uniqueness and attracts customers to make repeat purchases
