QCAA Business flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Market equilibrium
- The price at which quantity demanded equals quantity supplied, so there is no shortage or surplus and the market clears.
- Law of demand
- As the price of a good rises, the quantity demanded falls, all other factors held constant, producing a downward-sloping demand curve.
- Demand versus supply shift
- A change in price moves quantity along a curve; a change in a non-price factor such as income or input cost shifts the whole curve.
- Substitute goods
- Products that can replace one another, so a price rise in one increases demand for the other; cross-price elasticity is positive.
- Complementary goods
- Products consumed together, so a price rise in one reduces demand for the other; cross-price elasticity is negative.
- Price elasticity of demand
- Percentage change in quantity demanded divided by percentage change in price; values above one indicate elastic demand responsive to price.
- Oligopoly
- A market structure with few large sellers whose interdependence means each firm's pricing and output decisions affect the others' outcomes.
- PESTLE analysis
- A scan of political, economic, social, technological, legal and environmental forces outside the firm that shape opportunities and risks.
- Business model
- A description of how a firm creates, delivers and captures value, covering its customers, offering, channels, revenue streams and cost structure.
- Break-even quantity
- Fixed costs divided by contribution margin per unit; the output level at which total revenue exactly equals total cost.
- Contribution margin
- Selling price per unit minus variable cost per unit; the amount each sale adds toward covering fixed costs and then profit.
- Fixed versus variable costs
- Fixed costs do not change with output in the short run; variable costs rise directly as production volume increases.
- Capacity utilisation
- Actual output divided by maximum possible output, expressed as a percentage; low utilisation signals idle resources and higher unit costs.
- Just-in-time inventory
- Inputs arrive as needed rather than being stockpiled, reducing holding costs but increasing exposure to supply disruption.
- Lean production
- An operations approach that removes waste such as excess stock, waiting, defects and overprocessing to improve efficiency and quality.
- Total quality management
- A firm-wide commitment to continuous quality improvement, involving every employee, customer feedback and systematic process measurement.
- Operations transformation
- The process converting inputs of labour, materials, capital and information into outputs of goods or services valued by customers.
- Organic growth
- Expansion from within the firm through higher sales, new outlets or new products, funded by retained profit or borrowing.
- Inorganic growth
- Expansion through merger or acquisition of another business, delivering rapid scale but carrying integration and culture risks.
- Ansoff matrix
- A tool pairing existing or new products with existing or new markets to classify growth strategies from penetration to diversification.
- Economies of scale
- Falling average cost per unit as output rises, arising from purchasing discounts, technical efficiency, specialisation and cheaper finance.
- Diseconomies of scale
- Rising average cost per unit beyond an optimal size, caused by coordination difficulties, slower communication and reduced staff motivation.
- Vertical integration
- Combining with a firm at a different supply-chain stage: backward toward suppliers, forward toward distributors or retailers.
- Opportunity cost
- The value of the next best alternative forgone when a resource is committed to one use rather than another.
- Cost-benefit analysis
- A decision method comparing the total expected costs of an option with its total expected benefits to determine net benefit.
- Gross profit margin
- Gross profit divided by revenue, expressed as a percentage; it shows profitability before operating and financing costs are deducted.
- Stakeholder
- Any individual or group affected by or interested in a firm's activities, including owners, employees, customers, suppliers, lenders and community.
- Stakeholder conflict
- Arises when groups pursue incompatible objectives, such as shareholders seeking higher dividends while employees seek higher wages.
- Stakeholder power-interest grid
- A mapping tool ranking stakeholders by their influence and their concern, guiding how closely each group should be engaged.
- Triple bottom line
- A performance framework reporting results across profit, people and planet rather than financial outcomes alone.
- Corporate social responsibility
- Voluntary business action beyond legal requirements that addresses social, ethical and environmental impacts on stakeholders and community.
- Sustainability reporting
- Disclosure of environmental and social performance, such as emissions, energy, water, waste and labour practices, alongside financial results.