| A | B |
|---|
| 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. |
| 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 risk | 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 risks | 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. |
| 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 expense 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). |
| Pure risks | Chances of loss that carry with them the possibility of loss or no loss. |
| Reduction | A risk-response strategy that involves trying to reduce the chance of loss or severity of loss. |
| Regulated monopolies | Monopolies that the government allows to exist legally under controlled conditions. |
| Retention | A risk-response strategy that involves assuming responsibility for the risk rather than transferring it. |
| Speculative risks | Chances of loss that may result in loss, no change, or gain. |
| Transfer | A risk-response strategy that involves moving the impact of a risk to someone or something else. |
