Sectors of Industry
This sector extracts raw materials from the earth. What is it?
Primary sector
Two firms agree to join together to form one new company. What is it?
Merger
A business owned and controlled by one person. What is it?
Sole trader
Cost-saving benefits that large firms enjoy as they grow. What are they?
Economies of scale
A firm that operates in the secondary sector and makes products. What is it?
Manufacturer
This sector manufactures goods and constructs buildings. What is it?
Secondary sector
One firm buys another firm (can be friendly or hostile). What is it?
Takeover
A business owned by between two and twenty people. What is it?
Partnership
Cost savings that arise from within the business (e.g., bulk-buying). What are they?
Internal economies of scale
When a firm merges with a supplier (earlier stage of production). What type is it?
Backward vertical merger
This sector provides services to customers and other firms. What is it?
Tertiary sector
A merger between two firms in the same industry (e.g., Kraft & Heinz). What type is it?
Horizontal merger
Firms owned by the government, aiming to provide public services. What sector is this?
Public sector
Cost savings that arise from the location of the firm (e.g., skilled labour pool). What are they?
External economies of scale
When a firm merges with a retailer (later stage of production). What type is it?
Forward vertical merger
The three sectors of industry depend on each other. What is this called?
Interdependence
A merger between firms at different stages of production (e.g., a bakery buys a wheat farm). What type is it?
Vertical merger
The stock market value of a company (total shares × share price). What is it?
Market capitalisation
When a firm gets too large and average costs start to rise. What is it?
Diseconomies of scale
Large firms can borrow money more easily. What economy of scale is this?
Financial economies of scale
A children's clothes shop needs cotton (primary), machinists (secondary), and advertising (tertiary). What is this link called?
Chain of production
A merger between firms in unrelated areas of business (e.g., Tata Group). What type is it?
Conglomerate merger
A firm's sales revenue as a proportion of the industry's total sales revenue. What is it?
Market share
Name one type of internal economy of scale.
Purchasing / Technical / Financial / Managerial / Risk-bearing / Marketing / R&D (any one)
Large firms can spread risk by producing a range of products. What economy of scale is this?
Risk-bearing economies of scale