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26 Cards in this Set

  • Front
  • Back

Equilibrium point

point at which supply equals demand for a product


amount customers desire to purchase at X price and X time, which reflects value


amount suppliers are willing and able to offer for sale at X price, which reflects cost of resources and profit required

Forces of Supply

factors on the business side

Demand side

factors out of business control


money granted by the government to help a business keep the price of a product low

External shock

an outside event (weather, recession, terrorism) that affects demand


when demand fluctuates depending on time of year (chocolate sold more at easter etc.)

Indirect taxation

when something like VAT is collected by someone else who bears the tax burden, like a supplier of a raw material

Complimentary goods

goods that are purchased together and consumed together (hot dogs and buns)

Demand/Supply curve

a line on a graph representing demand or supply

Inferior goods

demand falls when income rises and rises when income falls (like tesco basic cornflakes)

Normal goods

demand rises if income rises and demand falls if income falls (like iPhones)

Substitute goods

alternatives that perform the same function (snickers bar / mars bar)


rivalry for sales/market share by offering the best practical combo of price/quality/service


gap between costs and price charged

Fixed supply

quantity can't change, for example seats in a cinema or at an opera

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

Market size

how big a market is- measured by potential buyers, total volume or value of sales

Mass markets

huge markets with high sales volumes

Niche markets

small part of the overall market with certain characteristics, for example a luxury/specialised product

Mass marketing

occurs when one standardised product is aimed at the largest group of consumers

Niche marketing

when a business focuses on a narrow market segment

Market share

indicates how much of a market's sales is dominated by each product, showing successes/faliures

Dynamic markets

constantly changing with innovation and lots of competitors adapting

Stable markets

pace of change slow, size/shares constant, innovation rare with minor product changes