Business Growth (Edexcel A-Level Economics A): Flashcards
📚Flashcards
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Practise the cards
10 cards from this deck
Firm (economics definition)
Firm (economics definition)
Organisation combining factors of production to create goods/services
Private sector firms
Private sector firms
Owned by private individuals/shareholders, not government
Public sector organisations
Public sector organisations
Owned and operated by the state (e.g. NHS)
Principal-agent problem
Principal-agent problem
Conflict when managers' aims differ from shareholders' aims
Satisficing behaviour
Satisficing behaviour
Managers aiming for satisfactory profits, not maximum profits
Organic growth
Organic growth
Firm grows internally by reinvesting profits or borrowing
Horizontal merger
Horizontal merger
Merger between firms in same industry at same production stage
Backward integration
Backward integration
Vertical merger with supplier (earlier in production process)
Forward integration
Forward integration
Vertical merger with distributor (later in production)
Conglomerate merger
Conglomerate merger
Merger between firms operating in different markets/industries