| A | B |
|---|
| free enterprise system | system in which individuals start and operate their own businesses without government involvement |
| competition | the struggle between companies for customers |
| price competition | competition that focuses on the sale price of a product |
| nonprice competition | businesses choose to compete on the basis of factors not related to price |
| risk | the possibility of financial loss |
| profit | the money earned from conducting business after all costs and expenses have been paid |
| supply | the amount or quantity of goods and services that producers will provide at various prices |
| demand | the amount or quantity of goods and services that consumers are willing and able to buy at various prices |
| surpluses | market situation in which supply exceeds demand |
| shortages | market situation in which demand exceeds supply |
| equilibrium | the point at which the amount of a product supplied equals the amount demanded |
| monopoly | a commodity has only one seller who has control over the supply and can exert nearly total control over prices |
| oligopoly | just a few competiting firms |
| market structure | the nature and degree of competition among businesses operating in the same industry |
| private sector | businesses not associated with government agencies |
| public sector | local, state, and federal government agencies |
| elastic demand | a change in price creates a change in demand |
| inelastic demand | a change in price has very little effect on demand |
| derived demand | the demand for industrial goods based on the demand for consumer goods and services |
| patent | intellectual or property rights to inventions, ideas, or items |
| nonprofit business | service organizations not operating for profit but for a cause |
| global business | businesses that operate in many countries in the world |
| domestic business | businesses that limits its scope of operation to one country |
| direct competition | businesses that use the same business format to sell the same or similar products |
| indirect competition | businesses that used different formats to sell similar products |
