MCE Chapter 1 Badaway
Franchise
The right to use a specific business's name and sell its products or services in a given territory
Monopolistic Competition
large number of sellers produce very similar products that buyers nevertheless perceive as different
perfect competition
many sellers but none is large enough to dictate the price of a product
Vertical Merger
the joining of two companies involved in different stages of related business
Horizontal Merger
the joining of two firms in the same industry
Equilibrium point
the point at which quantity supplied equals quantity demanded
Demand
the quantity of a good or service that consumers are willing and able to buy
Supply
the quantity of products that manufacturers or owners are willing to sell at different prices at a specific time
Economics
the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals
Recession
two or more consecutive quarters of decline in the GDP
Recovery
when economy stabilized and starts to grow, eventually leading to economic boom
Globalizaiton
world trade
Laws and Regulations
- Limitations or protections created - Costs of adhering to regulations
Cooperative (Co-op)
A business owned and controlled by the people who use it—producers, consumers, or workers with similar needs who pool their resources for mutual gain Serve one billion members worldwide Members democratically control the business by electing a board of directors that hires professional management Examples: Land O'Lakes, Sunkist Growers, Ocean Spray, Associated Press
Pure RIsk
A chance of loss, but no chance of gain.
Oligopoly
A market structure in which a few large firms dominate a market
C Corporation
A state-chartered legal entity with authority to act and have liability separate from its owners
S Corporation
A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
Corruption
Achieving ends through unsanctioned means (e.g., bribery, coercion, etc.)
Free Market Capitalism
All or most of the factors of production and distribution are privately owned and operated for profit
Communism
An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production
Socialism
An economic system based on the premise that some, if not most, basic businesses (e.g., steel mills, coal mines, utilities) should be owned by the government so that profits can be more evenly distributed among the people.
Nonprofit
An organization whose goals do not include making a personal profit for its owners or organizers
Monopoly
Complete control of a product or business by one person or group
Roosevelt's additional freedoms
Freedom of speech and expression Freedom to worship in your own way Freedom from want Freedom from fear
Command Economies
Government largely determines what goods and services gets produced, who gets them, and how the economy grows.
Economic System
How a society chooses to employ resources to produce goods and services, and distribute them for consumption (e.g., capitalism, socialism, etc.)
Resource Development
How to increase resources and to create conditions that will make better use of those resources
Venture Capitalists
Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.
5 main resources
Land, Labor, Capital, Knowledge, Entreprenuership
Corporation
Legal entity that is separate and distinct from its owners "artificial being" - entity that exists only in the eyes of the law Shareholders have rights to profits (dividends or appreciation of stock) but are not held personally liable for company's debts
LLC
Like S Corp, but without the special eligibility requirements Owner(s) can be a person, partnership, or corporation Owners are not personally liable Pay self-employment tax Pay personal tax or corporate tax LLC ownership is not transferable (no stock)
Free Market Economies
Market largely determines what goods and services gets produced, who gets them, and how the economy grows.
Sole Proprietorship
Owned, and usually managed, by one person Owner manages all areas of the business Usually, fewer benefits and lower wages for employees Most common form of business
rights under free market capitalism
Right to own private property Right to own business and keep all profits Right to freedom of competition Right to freedom of choice
competitive environment
Rivalry for buyer patronage among competing sellers of a product or service
Mixed Economy
Some decisions about allocation of resources are made by the market and some decisions are made by the government.
Small Business Administration (SBA)
US government agency that advises and assists small businesses by providing management, financial advice, and loans
state capitalism
a combination of freer markets and some government control
Partnership
a business owned by two or more people
Speculative Risk
a situation in which either profit or loss is possible
Business
any activity that seeks to provide goods and services to others while operating at a profit
Stakeholders
any constituencies in the organization's environment that are affected by an organization's decisions and actions
franchise agreement
arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory
Microeconomics
behavior of people and organizations in particular markets
Economic Boom
business is booming
Franchisor
company that develops a product concepts and sells others the rights to make and sell the products
Crowdfunding
donation based or debt-investment (peer-to-peer lending)
Conglomerate Merger
joining of firms in completely unrelated industries
Aquisition
one company's purchase of the property and obligations of another company
Macroeconomics
operation of a nation's economy as a whole
Consumer Market
people with unsatisfied wants and needs who have both the resources and willingness to buy
Franchisee
person who buys a franchise
Angels
private individuals who invest their own money in potentially hot new companies before they go public
Merger
result of two firms forming one company
Depression
severe recession, usually accompanied by deflation
Demography
statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.