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11 Cards in this Set
- Front
- Back
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Firm |
Something that brings together factors of production to produce something they can output |
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Industry |
A collection of firms competing to produce the same good |
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Private sector |
Firms competing in industries not owned by the government |
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Not-for-profit organisation |
Charities/ social enterprises that do not retain any of their profits |
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Organic growth |
Business grows internally by reinvesting profits or by borrowing from the bank |
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Horizontal intergration |
Two businesses that are in direct competition join together |
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Vertical forward integration |
A supplier takes over a business that sells its products e.g. a brewery buys a pub |
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Vertical backwards integration |
A company takes over a firm that supplies some of its factors of production e.g. Pepsi buys a bottle production plant |
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Conglomerate |
A business takes over a business in a completely different industry |
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Principal-agent problem |
The shareholders and managers have differing views on how the company should be run |
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Demerger |
Firms feel they have grown too large so cut back on operations/ branch off into specialised firms (diseconomies of scale) |
