Business

• Define supply

  the quantity of a good or service that a firm is willing and able to supply at a given price in a given time period
• Define demand

  the quantity of goods or services that consumers are willing and able to buy at a given price
• Demand variables

  • Population
  • Advertising
  • Substitutes
  • Income
  • Fashion/trend
  • Interest rates
  • Complementary goods
• Supply variables

  • Productivity
  • Indirect taxes
  • Number of suppliers
  • Technology
  • Subsidies
  • Weather
  • Cost of factors of production
• Define glut

  an excessively abundant supply of something
• Define lull

  a temporary interval of quiet or lack of activity
• Define price elasticity of demand

  the responsiveness of demand to a change in price
• When PED is elastic: (between -1 and -infinity)


  the percentage change in demand will be greater than change in price

  you want to be decreasing the price to increase total revenue
• When PED is inelastic (between 0 and -0.99)


  percentage change in price will be greater than the change in demand

  you want to be increasing the price to increase total revenue
• Factors of price elastic goods

  • very responsive to price changes
  • many substitutes (undifferentiated)
  • products widely available 


  e.g. cars, starbucks, coffee, oysters, mouthwash, etc
• Factors of price inelastic goods

  • less responsive to price changes - still affected by price rises
  • tend to be highly branded (fashionable), innovative, in short-supply, habit forming
  • few substitutes


  e.g. electricity, internet service, bread, milk, petrol, cigarettes
• $PED=$$\frac{percentage change in demand}{percentage change in price}$
• What are the roles of an entrepreneur?

  • generating business ideas
  • spotting an opportunity
  • running a business - customer service - how to spend money
  • expanding/developing a business - reduce staff - distinguishing business
• Define entrepreneur

  someone who has an idea and so starts and runs a business and is responsible for the risks involved
• Define enterprise

  a term used to describe a business/organisation/firm/company where new products/services are provided - the more innovative the better
• Benefits of intrapreneurs

  • can drive innovation in a business and uncover new commercial opportunities
  • satisfying the self-actualisation needs of employees
  • potential industry recognised awards for business who continually innovate - awards can help enhance the image of the business
  • individuals benefit by getting the opportunity to experiment and be creative without having to meet the cost of failure leading to a greater job satisfaction
• What is an intrapreneur?

  an entrepreneur in an existing organisation that works in a company that someone else founded, they do not financial risk for starting a concept or developing a product/service, however the benefits are for the organisation not for the intrapreneur
• Define innovation

  the process of being able to create new ideas and adapt an already existing idea
• How are ideas generates?

  • gap in the market
  • new invention
  • market research
  • copying/adapting what other businesses do
  • having an idea from an existing job
  • personal experience
  • skills
  • lifestyle choice
• What are the day-to-day tasks of running a business?

  • financial management - cash flow forecasts, arranging loans, making payments, chasing debt
  • administration - keep record of all transactions for text purposes, sending invoices, process wage slips, comply with legislation
  • marketing - building a website, email and social media campaigns, advertising, organising promotions, special offers
  • managing people - recruitment, selection and training
  • production - depending upon the business