| A | B |
|---|
| Elastic demand | People may not buy a product due to price changes |
| Circular flow | Money flows from consumers to businesses, vice versa |
| Invisible Hand | Smith's idea that laissez-faire leads to appropriate business action |
| Inelastic demand | Change in price doesn't change the demand |
| Partnership | two people entering into business together, they share responsibility |
| patent | inventor's exclusive right to sell his product |
| Quality control | Managing the product's freshness |
| Borrowing money for a period of 1-10 years | Intermediate financing |
| Purpose of advertising | to increase demand for a product |
| inventory control | supervising the amount a business uses in producing an item |
| Perfect competition | identical product, easy entry, no price competition |
| example of perfect competition | agricultural products- eggs, milk, corn |
| Unskilled workers | They do not require specialized training |
| Oligopoly | A small number of sellers controlling a market |
| Examples of an oligopoly | airlines, cell phones, |
| Natural monopoly | the government grants a company exclusive rights to provide a service |
| Economies of scale | ability to produce a lot at a low cost |
| Barriers to entry | obstacles in the way of starting a business |
| corporation | a business arrangement that allows stock to be sold to raise capital |
| equilibrium | the price that allows demand to equal supply |
| merger | companies joining together, sharing money and resources, in order to make more money |
| Fixed costs | Costs that do not change as more items are made |
| Variable costs | costs that change as more items are made |
