Operating in Competitive Markets Flashcards

All 6 cards in this deck

What is a market in business?

A place or situation where buyers and sellers exchange goods and services for money — it can be local, national, international or online.

What is competition in a business context?

A situation where more than one business tries to compete for the same customers in a market.

What is a monopoly?

A market situation where one firm holds 25% or more of the market share, effectively controlling an industry.

In a market with many small or medium-sized competitors, what do businesses typically compete on?

Low prices, advertising, service quality and convenient locations.

True or false? Competition in a market can reduce a business's profit margins.

True. To attract customers a business may have to lower prices or spend more on quality, service and innovation, squeezing the margin on each sale.

Name one way a manufacturer can reduce its production costs so it can lower its selling price and compete internationally.

Change to flow production. The cost saving can be passed on to customers, making the business more price competitive and boosting sales.