EC-002
What are production costs?
This is the term for the amount of money a business spends to produce its goods or services.
What is credit risk?
A business faces this type of risk when customers fail to pay their invoices on time or at all.
What is monopolistic competition?
Answer: This is the type of competition where businesses sell similar products but differentiate through branding, quality, or price.
What is entrepreneurship?
This principle of the private enterprise system allows individuals to start and run their own businesses.
What is a command economy?
in this type of economic system, the government makes all major economic decisions.
What is demand?
Fluctuations in this market factor can influence the selling price of goods and the profitability of a business.
What is competitive risk?
This risk involves losing market share due to new competitors entering the industry.
What is innovation?
Answer: A major tech company releasing a groundbreaking product is an example of this strategy to gain an edge over rivals.
What is consumer sovereignty?
The freedom to choose what to buy, where to work, and how to spend money is an example of this economic right.
What is a market economy?
This system relies on supply and demand with minimal government interference
What is political risk?
This type of risk arises from unexpected changes in government regulations or policies.
What is environmental risk?
A sudden natural disaster, such as a hurricane, represents this kind of risk to a business.
What is price competition?
This occurs when companies lower prices to attract customers, often at the expense of profits.
What is profit motive?
The private enterprise system thrives on this economic incentive that drives businesses to innovate and grow.
What is a mixed economy?
In this mixed system, the government provides public services while private businesses operate freely.
What is unsystematic risk?
Diversifying investments helps mitigate this type of risk, which is specific to a single industry or company.
What is reputational risk?
When a product recall damages a company's reputation, it is an example of this type of risk.
What is cost advantage?
The ability to produce goods more efficiently than competitors, leading to lower costs, is known as this advantage.
Who are employees and entrepreneurs?
Answer: Private enterprises rely on this group to supply labor, ideas, and leadership.
What is a traditional economy?
This traditional system is guided by customs, beliefs, and community roles rather than formal markets.
What is risk assessment?
Taking calculated risks often leads to higher rewards, but failing to do this properly can significantly harm profitability.
What is market risk?
Businesses can mitigate this financial risk by using hedging strategies in volatile markets.
What is e-commerce?
in the 21st century, this digital marketplace factor has become critical for businesses competing globally.
What is capitalism?
Competition and customer choice are two critical benefits provided by this type of economic system.
Who are consumers?
In capitalist systems, this group has the most power in deciding what gets produced.