External influences Flashcards
(30 cards)
What are the different types of market structures in order?
Monopoly,Duopoly, Oligopoly, Monopolistic Competition, Competitive market, Perfect market
Whats a monopoly?
A single firm supply a whole market, must have at least 25% market share
What is a duopoly?
When two firms control the market, e.g. cola market (Pepsi and Coke)
What is a oligopoly?
Several large firms dominate the market e.g. supermarkets
What is monopolistic market?
Many small firms maintain control of the market, restaurant chain
What is a competitive market?
Many firms control the market with intense price competition, low product differentiation.
What is a perfect competition market?
All products are identical, with many buyers and sellers having to accept the price.
What is meant by barriers to entry?
The factors that could prevent a business from entering and competing in a market.
What is meant by barriers to exit?
The factors that could prevent a business from leaving a market even if it wants to such as having high amount of specialized assets that are hard to sell making exit not viable.
What is meant by a market?
Any situation where buyers and sellers are in contact in order to establish a price.
How is market price determined?
Demand, Supply
What is equilibrium price?
The price at which the consumers demand is equal to what the business is prepared to supply.
What are the factors that determine demand?
Price, Income, Wealth,Advertising, Promotional offers, Taste and fashion, Demographic changes, Government action, amount of substitutes.
What are complements?
Products that are joint in demand that is when a product is bought is the other, e.g. DVD players and DVDs.
What are the factors that determine supply?
Price, Costs, Tax, Subsidies.
What are subsidies?
A payment from the government to encourage the business to increase supply.
What is the competition law?
It’s illegal for businesses to restrict competition, e.g. charging low prices to for competition out, Businesses conspiring together to keep up prices.
Whats an employment tribunal?
A special type of court that only deals with employment related issues such as victimization or unfair dismissal.
What are the effects of technology on a business?
Employees often associate with technological change with unemployment, due to computers and technology not needing the same amount of employees.
New technology makes current workers need to acquire new skills to be able to operate the equipment.
Changes with new technology may force employees to move to different departments as, technology is begging to dominate production.
What are the benefits of technological change?
May create more jobs through the introduction of new technology, e.g. In banks cashiers may have fallen but online banking has increased greatly resulting in new employment required.
New technology creates new demand
Results in learning new skills and introducing new technology can motivate staff as they feel as they are being invested in.
What are the environmental issues with technological change?
Increased air pollution due to more technology being implemented into the work place.
What is free trade?
Trade without tariffs or quotas being imposed when products are traded.
What is a single market?
A market in which there is a single set of laws and regulations relating to the movement of products, people and money; all businesses in the single market have to abide by these.
What are trade barriers?
Are ways to prevent imports into a country, some examples of trade barriers are putting quotas on the amount of imports allowed in a country. Another way to solve the problem would be to put a tax on goods entering from abroad. Making imports expensive.
