Markets andconsumers

Mind Map by missiep, updated more than 1 year ago
Created by missiep about 6 years ago


business chapters 4 , 5 and 6 (demand and supply)

Resource summary

Markets andconsumers
1 Markets = where buyers and sellers agree to buy or sell at a price that makes the transaction worthwhile
2 Exchange = selling produce for money
3 Specialisation = creating products we can make and sell most efficiently
4 Competition = businesses strive against each other to attract more customers by keeping prices down and making the product more appealing. More sellers = more competition = lower prices
5 Costs = payments to get product into market
5.1 wages
5.2 premises
5.3 input costs
5.3.1 raw materials
5.3.2 components
5.3.3 inputs from wholesalers
5.3.4 business rates
5.3.5 interest
5.3.6 energy rates
6 Sales revenue = price x quantity sold
7 Profit = Revenue - Cost
8 Investment = spending now to generate future income
8.1 capital equipment such as machinery, computers, veichles, research, development, training
9 Scarcity = when people want to buy more of a product than there is being produced
10 Incentives = rewards to induce certain behaviour e.g. profit
11 Supply = quantity of a product produced
11.1 Factors that affect supply
11.1.1 Cost of production
11.1.2 New tech Cost falls, price falls, supply rises
11.1.3 government policies e.g. VAT
11.1.4 Good prices
12 Demand = quantity of product/service customers want to buy
12.1 Factors that affect demand
12.1.1 Fall in prices
12.1.2 incomes
12.1.3 substitutes products which replace each other Price of one product rises, demand for it's substitute rises
12.1.4 Complements products that go well together price of one product rises, demand for complement will fall
12.1.5 Tastes + fashions affected by advertising
12.1.6 population if growing, demand rises
13 Inferior goods = those that people buy more of when their incomes fall
14 Normal goods = those that are not inferior
15 Cost of production = payments needed to create a products + make it available in the market
15.1 wages, premises, capital equipment, inputs etc
16 Process innovation = developing completely new products
16.1 uses new tech to produce at a lower cost
17 Technological change = uses new scientific knowledge + improved engineering techniques to create new products
18 Market orientation = business focus of customer needs
19 Product orientation = focus on product, price + promo
20 Demand curve = relationship between price + quantity that customers want to buy
21 Supply curve = relationship between price + quantity that producers want to sell
22 Equilibrium price = price both buyers and sellers are satisfied with
23 market clearing price = current selling price
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