Business Basics
What is the main goal of most businesses?
To make a profit
What is a target market?
A specific group of consumers a business aims to reach
What happens at the point where supply equals demand?
Equilibrium price is reached
What does COGS stand for?
Cost of Goods Sold
What does CSR stand for?
Corporate Social Responsibility
Name the four factors of production.
Land, Labor, Capital, Entrepreneurship
What stage of the product life cycle usually has the highest profits?
Maturity Stage
What is the term for the total value of all goods and services produced in a country in a year?
Gross Domestic Product (GDP)
What is the formula for profit?
=Revenue - Cost
What is an example of an ethical dilemma in business?
Choosing between profits and environmental protection
What is the term for anything a business owns that has value?
Asset
What is the difference between brand awareness and brand loyalty?
Awareness = knowing the brand; Loyalty = repeatedly choosing it
Which type of economy combines private enterprise with government involvement?
Mixed Economy
What is the break-even point?
Where total revenue equals total cost (no profit or loss)
A company that’s the first to introduce a new product is called a what?
First Mover
What is the difference between a for-profit and a nonprofit organization?
For-profits aim to earn profit for owners; nonprofits reinvest surplus to support a mission
When a company sells products directly to consumers through mail, email, or online — what type of marketing is this?
Direct Marketing
What does the Invisible Hand Theory describe?
How self-interest unintentionally benefits society through market forces
If a product sells for $20 and the variable cost is $8, what is the contribution margin?
$12 per unit
What is the difference between an innovation and an invention?
Invention = new creation; Innovation = improving or applying it effectively
What is the term for anyone affected by a business’s decisions (customers, employees, community, etc.)?
Stakeholders
What is positioning in marketing?
How a product is perceived in the minds of consumers relative to competitors
What are fixed costs and how do they differ from variable costs?
Fixed costs don’t change with output (e.g., rent); variable costs rise with production (e.g., materials)
What accounting term measures what a company owes to others?
Liabilities
What is state capitalism?
An economy where the government owns or controls some major businesses