Market Influence on Business Strategies

Question 1

What is a collection of buyers and sellers meeting or communicating in order to trade goods or services?

Answer 1

Market

Question 2

What dictates price and is the maximum quantity of a specific good that consumers are willing and able to purchase at each and every price?

Answer 2

Demand curve

Question 3

What is dictate by price?

Answer 3

Quantity demanded

Question 4

What is the result from change in price and slides along the curve?

Answer 4

Change in quantity demanded

Question 5

What is not due to change in price and shifts curve?

Answer 5

Change in demand

Question 6

What is a downward sloping curve?

Answer 6

Fundamental Law of Demand

Question 7

What effect is when consumers tend to purchase more(less) of a good when its price falls(rises) in relation to the price of other goods?

Answer 7

Substitution effect

Question 8

What are the factors that shift the demand curve?

Answer 8

Wealth, Price of related goods, consumer income, consumer tastes, consumer expectations, or number of buyers

Question 9

What is the maximum qunatity of a specific good sellers are willing and able to produce at each & every price?

Answer 9

Supply curve

Question 10

What are the factors that shift supply curves?

Answer 10

Price expectations, production costs, price or demand for other goods, subsidies or taxes, and technology

Question 11

When is a market in equilibrium?

Answer 11

No forces acting to change the current price/quantity combination. Also, point where the supply & demand curves intersect.

Question 12

What are price ceilings?

Answer 12

Price established below the equilibrium price(shortage), QD>QS

Question 13

What are price floors?

Answer 13

Minimum price set above the equilibrium price(surplus), QS>QD

Question 14

What is the measure of how sensitive demand for?

Answer 14

Elasticity

Question 15

Calculation for Price Elasticity of Demand

Answer 15

% change of quantity demanded / % change in price

Question 16

What is not sensitive and when absolute price of elasticity < 1.0?

Answer 16

Price inelasticity

Question 17

What is sensitive and absolute price of elasticity > 1.0?

Answer 17

Price elasticity

Question 18

What is the absolute price of elasticity = 1.0?

Answer 18

Unit elasticity

Question 19

Calculation for Price Elasticity of Supply

Answer 19

% change of quantity supplied / % change in price

Question 20

Calculation for cross elasticity

Answer 20

% change in number of units of X demanded(supplied) / % change in price of Y

Question 21

Calculation for income elasticity of demand

Answer 21

% change in number of units of X demanded / % change in income

Question 22

What is it called when more and more units of an input are considered with a fixed amount of other inputs, output increases but at a diminishing rate?

Answer 22

Law of Diminishing Returns

Question 23

What type of cost is the change in total cost associated with a change in output quantity over a period of time?

Answer 23

Marginal cost

Question 24

What influences marginal cost?

Answer 24

Variable costs

Question 25

What are the 4 market structures?

Answer 25

Pure competition, monopolistic competition, oligopoly, and monopoly

Question 26

What market structure consists of no individual firm can influence the market price?

Answer 26

Pure competition

Question 27

What is the strategy under perfect competition?

Answer 27

Maintaining the market share and responsiveness of the sales price

Question 28

What market structure consists of many sellers compete to sell a differentiated product in a market

Answer 28

Monopolistic competition

Question 29

What is the strategy under monopolistic competition?

Answer 29

Maintaining the market share also plan for enhanced product differentiation.

Question 30

What market structure consists of few sellers dominate the sales of a product and entry of new sellers is difficult?

Answer 30

Oligopoly

Question 31

What is the strategy under oligopoly?

Answer 31

Focus on market share and call for the proper amount of advertising and ways to properly adapt to price changes

Question 32

What market structure consists of concentration of supply in the hands of a single firm?

Answer 32

Monopoly

Question 33

What are the strategies under monopoly?

Answer 33

Ignore market share and focus on profitability from production levels that maximize profits

Question 34

When does a firm operate best?

Answer 34

Marginal revenue = marginal cost

Question 35

What are the factors of production?

Answer 35

Land, labor, and capital

Question 36

What are the 4 components of SWOT analysis?

Answer 36

Strengths, Weaknesses, Opportunities, and Threats

Question 37

What are the major strategies for value chain analysis?

Answer 37

Core competencies, industry structure, and segmentation analysis

Question 38

What are the factors that affect the overall industry and competitive environment of the industry?

Answer 38

Economy, regulations, demographics, technological, social, and political

Question 39

What are the factors that affect the competitive environment of the firm?

Answer 39

Barriers, Market competitiveness, existence of substitute products, bargaining power of customers, & suppliers