What is economies of scale?
The reduction in average costs as a result of savings brought about by an increase in the scale of production
An increase in the long run average costs as a business expands beyond its ability to control and manage itself
What is demographics?
A set of values or moral principles determining what is right or wrong and good or bad
The structure of the population in terms of people and their gender,age and ethnic origin
What is diseconomies of scale?
An increase in long run average costs as a business expands beyond its ability to control and manage itself
What are ethics?
The structure of the population and their gender, age and ethnic origin
What are the benefits of acting ethically?
It may be costly
It would probably give the business a good reputation
may please stakeholders
May cause conflict between some stakeholders
Could attract new customers
May give edge over competition
May be difficult to define exactly what ethical is
May be attractive to potential employees
What is a monopoly?
When there is a few large firms with a large market share e.g. petrol
When there is only one firm in the market or has 25% or more market share e.g. apple, microsoft, united utilities
What is an oligopoly?
Where there is a few large firms in the market e.g. petrol - total, shell, esso
What is a fiercely competitive market?
When there is a few large firms in the market
Many firms, none of which are dominant and lots of different products cannot compete on price must have good deals/offers/products
What is an autocratic leader?
Delegates responsibility, asks opinions/involves staff, allows other to make decisions
Parent figure, will ask staff opinions but final decision is made by leader on what they think is best
Make all decisions, like to be in control, believes workers are lazy and will not involve them or ask opinions
What is a democratic leader?
A parent figure that will ask staff opinions but they will have the final say
Will delegate responsibility to staff, involving them and asking their opinions. They allow other to make decisions
What is a paternalistic leader?
Let employees get on with their work and only lead/help if asked to
Act like a parent figure asking employees for their opinions but leader will make the final decision
What is a strategic objective?
Short/medium time period, easy to change once set, everyday objectives made by junior managers
Long term objectives, difficult to change them once set and are made by senior managers
What is opportunity cost?
The thing that is given up when a decision is made/the next best thing
The difference between the cost of materials and the selling price
What is adding value?
The amount of profit made on an products after costs are covered
What is a consumer good?
A good that is sold to the general public
A good that is sold to other businesses
What are consumer non-durable goods?
Can only be used once/does not last long
Something that lasts long and can be used many times
What is short term finance?
Up to 3 years, used for day to day running of the business
Between 3-10 years and is most likely used to replace equipment, to expand or to change a regular overdraft into a formal loan
What is long term finance?
Longer than 10 years, usually spent on long term growth, spent on large products and are more risky
Between 3-10 years and most likely to be used to replace equipment, to expand, and to change regular overdraft into formal medium term loan
