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26 Cards in this Set
- Front
- Back
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Equilibrium point |
point at which supply equals demand for a product |
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Demand |
amount customers desire to purchase at X price and X time, which reflects value |
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Supply |
amount suppliers are willing and able to offer for sale at X price, which reflects cost of resources and profit required |
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Forces of Supply |
factors on the business side |
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Demand side |
factors out of business control |
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Subsidy |
money granted by the government to help a business keep the price of a product low |
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External shock |
an outside event (weather, recession, terrorism) that affects demand |
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Seasonality |
when demand fluctuates depending on time of year (chocolate sold more at easter etc.) |
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Indirect taxation |
when something like VAT is collected by someone else who bears the tax burden, like a supplier of a raw material |
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Complimentary goods |
goods that are purchased together and consumed together (hot dogs and buns) |
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Demand/Supply curve |
a line on a graph representing demand or supply |
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Inferior goods |
demand falls when income rises and rises when income falls (like tesco basic cornflakes) |
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Normal goods |
demand rises if income rises and demand falls if income falls (like iPhones) |
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Substitute goods |
alternatives that perform the same function (snickers bar / mars bar) |
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Competition |
rivalry for sales/market share by offering the best practical combo of price/quality/service |
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Margin |
gap between costs and price charged |
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Fixed supply |
quantity can't change, for example seats in a cinema or at an opera |
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Price Elasticity of Demand (PED) |
the reaction to a change in price in terms of demand, determined by percentage change in demand divided by percentage change in price |
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Market size |
how big a market is- measured by potential buyers, total volume or value of sales |
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Mass markets |
huge markets with high sales volumes |
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Niche markets |
small part of the overall market with certain characteristics, for example a luxury/specialised product |
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Mass marketing |
occurs when one standardised product is aimed at the largest group of consumers |
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Niche marketing |
when a business focuses on a narrow market segment |
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Market share |
indicates how much of a market's sales is dominated by each product, showing successes/faliures |
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Dynamic markets |
constantly changing with innovation and lots of competitors adapting |
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Stable markets |
pace of change slow, size/shares constant, innovation rare with minor product changes |
