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B.E 2.05
Unit 2.05 Key Terms
| Term | Definition |
|---|---|
| Avoidance | A risk-response strategy that involves choosing not to do something that is considered risky. |
| Business Risk | The possibility of loss (failure) or gain (success) inherent in conducting business. |
| Competition | The rivalry between two or more businesses to attract scarce customer dollars. |
| Cost of Goods | The amount of money a business pays for the products it sells or for the raw materials from which it produces goods to sell; the amount of money a business pays for the products (or for any part of the products) it sells. |
| Direct Competition | Rivalry between or among businesses that offer similar types of goods or services. |
| Economic Risks | The possibility of loss or failure that occurs as a result of the economy. |
| Expenses | The money that a business spends. |
| Gross Profit | Money left after the cost-of-goods expense is subtracted from total income (income from sales - cost of goods = gross profit). |
| Human Risk | The possibility of loss or failure from human error. |
| Income | The money received by resource owners and by producers for supplying goods and services to customers. |
| Indirect Competition | Rivalry between or among businesses that offer dissimilar goods or services. |
| Market Structure | The type of market, or environment, in which businesses operate. |
| Monopoly | A type of market structure in which a market is controlled by one supplier, and there are no substitute goods or services readily available. |
| Natural Risks | The possibility of loss or failure from nature. |
| Net Profit | Money left after the cost-of-goods expense and the operating expenses are each subtracted from the total income (gross profit - operating expense = net profit). |
| Nonprice Competition | A type of rivalry between or among businesses that involves factors other than price. |
| Oligopoly | A market structure in which there are relatively few sellers, and industry leaders usually determine prices. |
| Operating Expenses | All of the expenses involved in running a business. |
| Perfect Competition | A market structure in which there are many businesses selling a lot of identical products for about the same price to many buyers; also known as pure competition. |
| Price Competition | A type of rivalry between or among businesses that focuses on the use of price to attract scarce customer dollars. |
| Profit | Monetary reward a business owner receives for taking the risk involved in investing in a business; income left once all expenses are paid (income – expense = profit). |
| Profit Motive | The desire to make a profit, which moves people to invest in business. |
| Pure Risk | Risk with no opportunity of gain |
| Reduction | The process of making something less |
| Regulated Monopolies | A monopoly allowed to exist under certain regulations |
| Retention | Process by which a company ensures that its employees don't quit their jobs |
| Speculative Risk | A voluntary risk and will result in profit or loss |
| Transfer | Movement of assets, funds, or ownership rights from one place to another |
Created by:
ashley.g739
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