Description | Term | % Correct |
---|---|---|
Price paid per unit or total revenue (TR) ÷ output (Q) | Average Revenue | 100%
|
That which a firm makes when average revenue is exceeded by average cost | Loss | 100%
|
Internal economies of scale resulting from large firms being able to employ managers with more specialised functions such as accounting or development | Managerial Economies | 100%
|
A market situation in which all participants are numerous and well informed enough such that no party is able to exert control on prices, and monopolies are not present | Perfect Competition | 100%
|
Where firms aim to produce satisfactory results such as satisfactory profits rather than maximum profits | Satisficing | 100%
|
When a firm divided into two or more parts or sells off part of its business, being either full or partial | Demerger | 50%
|
The percentage of turnover in the UK in 2018 that was accounted for by large businesses (250+ employees) | 48% | 0%
|
The percentage of businesses in the UK that employed under ten people in 2018 | 96% | 0%
|
Where a firm purchases another firm | Acquisition or Take Over | 0%
|
That which will increase when exceeded by marginal cost and vice versa | Average Cost (AC) | 0%
|
Total cost (TC) ÷ output (Q) | Average Cost (AC) | 0%
|
A u-shaped curve that plots average costs against output | Average Cost Curve | 0%
|
Total fixed costs (TFC) ÷ output (Q) | Average Fixed Costs (AFC) | 0%
|
Total variable costs (TVC) ÷ output (Q) | Average Variable Costs (AVC) | 0%
|
Where a firm merges with or acquires a firm in an earlier stage of the production chain, such as a manufacturer and an extractor | Backward Vertical Integration | 0%
|
That which firms might do so as to ensure control over the supply of and price of materials | Backward Vertical Integration | 0%
|
The aims which a firm sets out to achieve, i.e. the reasons why the firm is in business | Business Objectives | 0%
|
Those which are affected by market conditions in that during a slowdown a firm may seek merely to survive, while during a boom it may seek to increase its profits | Business Objectives | 0%
|
Internal economies of scale resulting from the ability to sell by-products of production, such as chemicals from oil refinery | By-Product Economies | 0%
|
The four factors of production in alphabetical order | Capital, Enterprise, Labour, and Land | 0%
|
Private sector, not-for-profit organisations | Charities | 0%
|
Firms with separate legal status which are owned by their shareholders | Companies | 0%
|
An independent, non-ministerial department which works 'to promote competition for the benefit of consumers' | Competition and Markets Authority | 0%
|
That which firms might do so as to allow the covering of temporary losses for one product by subsidising it with profits from another, such as is done by Amazon.com | Conglomerate Integration | 0%
|
A merger between firms or acquisition of one firm by another that is operating in a different market | Conglomerate Integration | 0%
|
When output and costs rise at the same rate | Constant Returns to Scale | 0%
|
Actions taken by firms in order to demonstrate their commitment to acting in the public interest, perhaps in order to safeguard their market position, such as by paying fair wages or producing sustainably | Corporate Social Responsibility | 0%
|
That which firms might do so as; to concentrate on a smaller range of products, thereby increasing quality, to eliminate diseconomies of scale, to be more manageable, or because enforced by competition authorities | Demerge | 0%
|
That, some of the principal disadvantages of which are that; firms cannot compete so well with larger ones, cannot take advantage of certain economies of scale, and that it can be confusing for customers | Demerger | 0%
|
That which can cause confusion for workers, though may also present possible employment opportunities due to duplication | Demerger | 0%
|
The relationship between price and total revenue when demand is relatively price inelastic | Direct | 0%
|
When an increase in a firm's scale of production leads to production at higher long-run average costs, being either internal or external | Diseconomies of Scale | 0%
|
The rate at which marginal revenue falls relative to average revenue under conditions of imperfect competition | Double | 0%
|
When an increase in a firm's scale of production leads to production at lower long-run average costs, being either internal or external | Economies of scale | 0%
|
Where firms reduce average costs by producing a wider range of products which can be managed by existing administrative structures | Economies of Scope | 0%
|
The factor of production that takes risks, organises production, and earns profit | Enterprise | 0%
|
That which a firm achieves when it is producing that output which allows it to maximise profits, i.e. MR=MC | Equilibrium | 0%
|
That which an industry achieves when all firms are earning normal profit, with none making losses as they would exit the market, and none earning supernormal profit as this would incentivise new firms to enter the market | Equilibrium | 0%
|
Diseconomies of scale that arise from the expansion of an industry in which firms are operating | External Diseconomies of Scale | 0%
|
That which often arises from increased resource costs due to competition, as well as pollution, congestion, and overuse and depreciation of infrastructure | External Diseconomies of Scale | 0%
|
Economies of scale that arise from the expansion of an industry in which firms are operating | External Economies of Scale | 0%
|
That which often arises where firms within a particular industry are concentrated within one geographic area such as horse racing in Newmarket, Suffolk | External Economies of Scale | 0%
|
That which happens to average fixed costs (AFC) as output increases due to the same cost being dividing between a higher number of units | Falls | 0%
|
Internal economies of scale resulting from large firms being able to obtain finance more cheaply and easily due to their creditworthiness | Financial Economies | 0%
|
Those, the growth of which is measured in terms of; output, sales revenue, market share, asset value, and/or workforce size | Firms | 0%
|
That which all costs are when output is zero | Fixed Costs | 0%
|
Costs that do not vary with the level of output, calculated as total cost (TC) - variable cost (VC) | Fixed Costs (FC) | 0%
|
Where a firm merges with or acquires a firm in a later stage of the production chain, such as a manufacturer and a retailer | Forward Vertical Integration | 0%
|
That which firms might do so as to ensure their products are being sold, and sold well, while also stifling its rival companies' ability to compete | Forward Vertical Integration | 0%
|
Where the new firms resulting from a demerger have no direct connection to one another | Full Demerger | 0%
|
The which firms might not do so as to; avoid regulatory burdens, minimise overhead costs, maintain flexibility, adaptability, and the close relationship with consumers, maintain quality control, or due to the owner's lifestyle choice | Grow | 0%
|
That which firms might do to; increase profits, decrease costs through economies of scale, increase market share and/or power, diversify thereby mitigating risks, or for managerial motives | Grow | 0%
|
That, the principal barriers to which are a lack of funding, lack of demand, and fear of diseconomies of scale | Growth | 0%
|
That which firms may avoid due to the owner not desiring increased pressure or working hours, or to lose control to shareholders were the firm to become publicly limited | Growth | 0%
|
A merger between firms or acquisition of one firm by another within the same industry and stage of production | Horizontal Integration | 0%
|
That which firms might do so as to benefit from economies of scale or to eliminate competition | Horizontal Integration | 0%
|
The conditions under which average revenue and marginal revenue fall with a rise in output | Imperfect Competition | 0%
|
A market situation in which some participants are able to exert some control over prices, with some monopolies and monopsonies being present | Imperfect Competition | 0%
|
That which consists of all firms which produce the same type of good or service | Industry | 0%
|
That, the principal disadvantages of which are that it is very costly, can lead to diseconomies of scale, reduces competition harming consumer choice, can lead to culture clashes, or can fail due to an inability to marry together different systems | Integration | 0%
|
A process by which firms expand by merging with or acquiring other firms | Integration or External Growth | 0%
|
Diseconomies of scale that arise from the expansion of a firm | Internal Diseconomies of Scale | 0%
|
That which often arises from inefficiencies and complexities in managing and administering large firms, such as due to a result of the principal-agent problem | Internal Diseconomies of Scale | 0%
|
Economies of scale that arise from the expansion of a firm | Internal Economies of Scale | 0%
|
The relationship between price and total revenue when demand is relatively price elastic | Inverse | 0%
|
Internal economies of scale resulting from large firms having more scope for division of labour | Labour Economies | 0%
|
A short-run law that an increase in one of a firm's factors of production when the other factor(s) remains fixed, will eventually lead to the firm deriving diminishing marginal returns from the variable factor | Law of Diminishing Returns | 0%
|
Where shareholders are responsible for company debt up to the nominal value of their shares | Limited Liability | 0%
|
The period of time in which the scale of a firms operations can be changed, i.e. all factors of production are variable | Long Run | 0%
|
The cost per unit of output feasible when all factors of production are variable | Long-Run Average Cost | 0%
|
A usually u-shaped curve that plots costs where all factors of production are variable against output | Long-Run Average Cost Curve or Envelope Curve | 0%
|
Those that growth, irrespective of profits, might benefit by granting them higher pay, status, and power | Managers | 0%
|
A u-shaped curve that plots the cost of an additional unit of production against output | Marginal Cost Curve | 0%
|
The cost of producing an additional unit of output, calculated as change in total costs ÷ change in output (ΔTC ÷ ΔQ) or (total cost from producing x+1 units) - (total from selling x units) | Marginal Costs (MC) | 0%
|
The additional revenue gained by a firm from selling an additional unit of output | Marginal Revenue (MR) | 0%
|
That which consists of firms in an industry and the firms and individuals who purchase the product | Market | 0%
|
That the size of which may limit the extent to which a business can grow as niche or local ones have limited demand, while the state of the economy can reduce demand and thereby investment | Market | 0%
|
Internal economies of scale resulting from cheaper rates from advertising agencies, such as how a full page advert does not cost double a half page advert | Marketing Economies | 0%
|
The percentage of the total market which a firm supplies, measured either in terms of sales or revenue | Market Share | 0%
|
The rule that profits are maximised when marginal cost is equal to marginal revenue | MC=MR Rule | 0%
|
Where firms agree to unite on a more or less equal footing to form a new company, being either vertical, horizontal, or conglomerate | Merger | 0%
|
The level of output at which the long-run average cost curve reaches its lowest point, with no further advantage to economies of scale being possible | Minimum Efficient Scale | 0%
|
The power of a firm over a market by lieu of it purchasing a substantial share of the product, such as British Sugar has over sugar beet | Monopsony Power | 0%
|
A company that has production units in more than one country | Multinational Company | 0%
|
A monopoly that arises in an industry in which such substantial economies of scale are present that only one firm is viable | Natural Monopoly | 0%
|
Profit that covers the opportunity cost of being in business, being just sufficient to keep the firm in the market | Normal Profit | 0%
|
That which a firm makes when average revenue equals average cost | Normal Profit | 0%
|
The minimum point on the average cost curve, where it is intersected by the marginal cost curve | Optimum Output | 0%
|
A process by which firms expand from within as done by Marks and Spencer, being controlled and avoiding excess capacity, but also slow | Organic or Internal Growth | 0%
|
That, the use of which, has blurred the line between the private and public sectors in the UK | Outsourcing | 0%
|
Fixed expenses not directly related to labour or production, required to operate a business, such as electricity bills, rent, &c. | Overhead Costs | 0%
|
Where the parent company retains some of the shares in a demerged business | Partial Demerger | 0%
|
The conditions under which average revenue and marginal revenue are equal and constant | Perfect Competition | 0%
|
That which firms may be seeking to influence by growing and increasing their market share | Price | 0%
|
Those firms concerned with the extraction of raw materials | Primary Production | 0%
|
The problem arising from conflicting objectives between the principals (e.g. shareholders) and the agents (e.g. managers) who make decisions on their behalf | Principal-Agent Problem | 0%
|
That, the increase of which may lead to managers receiving higher salaries, bonuses, or the change of promotion | Profit | 0%
|
That which many businesses operate for, often to provide income for the owner or dividends for the shareholders, as opposed to those that focus on providing a service such as a private school | Profit | 0%
|
Total revenue (TR) - Total Cost (TC) | Profit (π) | 0%
|
Where a firm produces output at the level of highest profit, where total revenue most exceeds total cost | Profit Maximisation | 0%
|
That which Amazon.com has not focussed on, so as to be able to lower prices and thereby increase its market share at the expense of its competitors | Profit Maximisation | 0%
|
A company with statutory minimum capital, the shares of which are publicly tradable subject to limited liability | Public Limited Company | 0%
|
An organisation or corporation owned and funded by the government such as the Bank of England or a public sector hospital | Public Sector Organisation or Public Corporation | 0%
|
Internal economies of scale resulting from the trade discounts of buying in bulk | Purchasing Economies | 0%
|
One of the first steps taken after a merger or acquisition where unnecessary 'duplicates' of staff, shops, &c. are made redundant or closed | Rationalisation | 0%
|
That which might limit the potential for a firm to grow by rejecting mergers or acquisitions not in the public interest, or forcing the firm to divest part of its business | Regulation | 0%
|
That which price elasticity of demand is when marginal revenue is positive | Relatively Elastic | 0%
|
That which price elasticity of demand is when marginal revenue is negative | Relatively Inelastic | 0%
|
Internal economies of scale resulting from large firms being able to use more specialised staff and invest in making production more efficient | Research and Development Economies | 0%
|
Where a firm produces output at the level of highest total revenue and thus above maximum profit, marginal revenue equaling zero | Revenue Maximisation | 0%
|
That which firms may seek to achieve by reducing prices to stimulate demand or increasing prices while maintaining sales | Revenue Maximisation | 0%
|
Internal economies of scale resulting from large firms being able to diversify and thus spread and mitigate risks across industries | Risk-Based Economies | 0%
|
The total volume of goods and services sold | Sales | 0%
|
That which firms may seek to achieve by; reducing prices to stimulate demand, increasing their product range, or spending on advertising | Sales Maximisation | 0%
|
Where a firm produces output at the level of highest total sales and thus above maximum revenue, with average cost and total cost equalling average revenue and total revenue respectively, all profit being normal | Sales Maximisation | 0%
|
The which often arises where conflicts of interest arise between stakeholders | Satisficing | 0%
|
That which many small businesses seek as opposed to profit maximisation | Satisficing Profits | 0%
|
Those firms concerned with manufacture | Secondary Production | 0%
|
Internal economies of scale resulting from large firms' distribution costs being lower per-unit | Selling Economies | 0%
|
Those that higher profits might benefit by increasing dividends and capital gains | Shareholders | 0%
|
The period of time in which the scale of a firms operations - though not variable factors like the number of people employed (assuming spare capacity) - cannot be changed | Short Run | 0%
|
Groups of people that have an interest in an organisation such as; owners, consumers, employers, governments, communities, &c. | Stakeholders | 0%
|
They that affect a business's objectives due to their competing interests requiring the firm to balance them in line with its own circumstances | Stakeholders | 0%
|
Short-run fixed costs which have already been paid for and cannot be recovered if the firms closes down | Sunk Costs | 0%
|
That which a firm makes when average revenue exceeds average cost | Supernormal Profit | 0%
|
Profits that exceed normal profits | Supernormal Profits | 0%
|
That which firms can earn in the long-run by erecting barriers to other firms entering the market possibly due to having monopoly power | Supernormal Profits | 0%
|
That which - if not sub-contractors - many small firms often act as to larger firms | Suppliers | 0%
|
Internal economies of scale resulting from large or specialised equipment often being cheaper per-unit to operate than small equipment, as with combine harvesters | Technical Economies | 0%
|
Those firms concerned with providing services | Tertiary Production | 0%
|
That which affects a business's objectives in that if it has just been established it may seek just to break even, whereas if it is more well established it may look to achieve profit and expansion | Time | 0%
|
A curve with an upward slope that plots total costs against output | Total Cost Curve | 0%
|
The sum of all costs incurred in the production or purchasing of goods and services, calculated as cost per unit × output (Q) or total fixed costs (TFC) + total variable costs (TVC) | Total Costs (TC) | 0%
|
A horizontal curve that plots those non-variable total costs against output | Total Fixed Cost Curve | 0%
|
A hump-shaped curve showing changes in total revenue against changes in output, at the peak of which demand is unit elastic and marginal revenue equals zero | Total Revenue Curve | 0%
|
Price per unit (P) × output (Q) | Total Revenue (TR) | 0%
|
That the position of which, short-run profit maximisation often depends on | Trade Cycle | 0%
|
That which price elasticity of demand is when marginal revenue equals zero | Unit Elastic | 0%
|
Costs that vary with the level of output, calculated as total cost (TC) - fixed cost (FC) | Variable Costs (VC) | 0%
|
A merger between firms or acquisition of one firm by another within the same industry but different stages of production, being either forward or backward | Vertical Integration | 0%
|
Where a firm is not operating at minimum cost, perhaps arising from the effects of the principal-agent problem | X-Inefficiency | 0%
|
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