The rivalry among businesses for sales to potential customers

Chapter 1-Business: The organized effort of individuals to produce and sell, for a profit, the goods andservices that satisfy society’s needs.oMust combine all 4 resources effectively to be successful:Human resources: people who furnish their labor to the businessMaterial resources: raw materials used in manufacturing processesInformational resources: money required to pay employees, purchase materialsFinancial resources: tells the managers how effectively the other 3 resources arebeing combined and used.oSatisfying the needs of the firm’s customersoProfit-Classification of businessoManufacturing businessoServiceoMarketing intermediaries: buy products from manufactures and resellmanufacture > marketing intermediaries > consumers-Economicis the study of how wealth (anything of value) is created and distributed.oMicro: study of decisions made by individuals and businessesoMacro: study of the national economy and the global economyoProductivity: The average level of output per worker per houroGross Domestic Product (GDP): The total value of all goods and services produced by allpeople within the boundaries of a country during a one-year periodoConsumer Price IndexCPI:A monthly index that measures the changes in prices of afixed basket of goods purchased by a typical consumer in an urban areaoProducer Price IndexPPI:An index that measures prices that producers receive for theirfinished goodsDiffers from CPI due to government subsidies, sales & excise taxes, distributioncosts-Interest RatesoDiscount Rates: The interest rate the Fed offers to member banks who need to borrowmoney to keep their reserves at or above the minimum.oPrime Rate: The lowest interest rate that banks charge their most credit-worthycustomers. Also the basis for many home loan programs. Always adjusts based on thediscount rate.oFederal funds state: Interest rate banks charge one another for the use of Federal funds.The Fed indirectly controls this rate by the way it buys and sells Treasuries to the banks.-The Business Cycle: the fluctuations of the economic growth rate for a country()oPeak period(prosperity): the economy is at its highest point and unemployment is low.Total income is relatively highoRecession:2 or more consecutive 3 month periods of decline in a country’s GDP.Unemployment rises, total buying power declinesoDepression:a severe recession that lasts longer than a typical recession and has a largerdecline in business when compared to a recession

-Competition:is rivalry among businesses for sales to potential customers. In a capitalisticsociety, competition ensures only businesses that provide consumers with useful products andservices at fair prices will survive.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 8 pages?

Upload your study docs or become a

Course Hero member to access this document

Tags

Business, Small business Administration, total value

Glossary
Business, 8e
Chapter 1: Exploring the World of Business

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

barter a system of exchange in which goods or services are traded directly for other goods and/or services without using money

business "the organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society�s needs"

business cycle the recurrence of periods of growth and recession in a nation�s economic activity

capitalism an economic system in which individuals own and operate the majority of businesses that provide goods and services

command economy "an economic system in which the government decides what will be produced, how it will be produced, who gets what is produced, and who owns and controls the major factors of production"

competition rivalry among businesses for sales to potential customers

consumer products goods and services purchased by individuals for personal consumption

demand the quantity of a product that buyers are willing to purchase at each of various prices

depression a severe recession that lasts longer than a recession

domestic system "a method of manufacturing in which an entrepreneur distributes raw materials to various homes, where families would process them into finished goods to be offered for sale by the merchant entrepreneur"

e-business "the organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society�s needs through the Internet."

economics the study of how wealth is created and distributed

economy the way in which people deal with the creation and distribution of wealth.

entrepreneur "a person who risks time, effort, and money to start and operate a business "

factors of production "land and natural resources, labor, capital, and entrepreneurship"

factory system "a system of manufacturing in which all the materials, machinery, and workers required to manufacture a product are assembled in one place"

federal deficit a shortfall created when the federal government spends more in a fiscal year than it receives

fiscal policy government influence on the amount of savings and expenditures; accomplished by altering the tax structure and by changing the levels of government spending

free enterprise "the system of business in which individuals are free to decide what to produce, how to produce it, and at what price to sell it."

gross domestic product (GDP) the total dollar value of all goods and services produced by all people within the boundaries of a country during a one-year period

inflation a general rise in the level of prices

market economy "an economic system in which businesses and individuals decide what to produce and buy, and the market determines quantities sold and prices "

market price the price at which the quantity demanded is exactly equal to the quantity supplied

mixed economy an economy that exhibits elements of both capitalism and socialism

monetary policies Federal Reserve decisions that determine the size of the supply of money in the nation and the level of interest rates

monopolistic competition a market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors

monopoly a market (or industry) with only one seller

national debt the total of all federal deficits

natural monopoly an industry requiring huge investments in capital and within which duplication of facilities would be wasteful and thus not in the public interest

oligopoly a market (or industry) in which there are few sellers

product differentiation the process of developing and promoting differences between one�s products and all similar products

productivity the average level of output per worker per hour

profit what remains after all business expenses have been deducted from sales revenue

pure competition "the market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product"

recession two or more consecutive three-month periods of decline in a country�s gross domestic product

specialization the separation of a manufacturing process into distinct tasks and the assignment of different tasks to different individuals

standard of living "a loose, subjective measure of how well off an individual or a society is mainly in terms of want satisfaction through goods and services"

supply the quantity of a product that producers are willing to sell at each of various prices

What is the rivalry among businesses called?

What is the rivalry between businesses to win customers?

What is the rivalry among businesses to sell their goods and services called?

What term is used to describe the rivalry among businesses in order to gain customers?