An organisation whose function is to combine resources for the production of goods and services
What is an economy of scale?
Cost reductions that occur when companies increase production
What are barriers to entry?
Factors that prevent or make it difficult for new firms to enter a market
What are niche markets?
A segment of a larger market defined by its own special needs
What is a monopolist?
Only company within a market
When does the principle-agent problem occur?
Occurs when the aims of a firm’s owners diverge from those of the managers, which may lead to a conflict between the aims and policies of these two groups
What is the private sector?
Part of the economy which assets are owned by individuals or groups
What is the public sector?
Part of the economy owned and regulated by the government
What do profit organisations aim to do?
Make or maximise a profit
What are characteristics of non-profit organisations?
Part of the private sector
Independent organisations
Cover own costs and surpluses are ploughed back into the business
