COMPETITIVE AND CONCERNTRATED MARKETS

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What do market structures depend on?
number of firms, degree of product differentiation, barriers to entry and exit
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Describe profit maximisation
Benefits: higher salaries for managers and workers, higher dividends for shareholders, encourages firms to be efficient and to keep looking at cutting costs, high profit enables more recourses to invest in future projects+safeguards long-term success
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Describe social/environmental concerns
A firm may incur extra expenses to choose products that don’t harm the environment or choose products that are not tested on animals. This can prove a good marketing strategy(The Body Shop).
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what is profit satisficing
Satisficers examine a limited set of alternatives and choose the best of them.Satisficing involves the owners of a business (shareholders)setting minimum acceptable levels of achievement in terms of revenue and profit.
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explain profit satisficing behaviour
The idea that businesses depart from pure profit maximisation is linked to the existence of a divorce of ownership from control and the principal agent problem as owneers may not have time to run the whole business but concerntrate on a small aspect
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why can profit sat
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Card 2

Front

Describe profit maximisation

Back

Benefits: higher salaries for managers and workers, higher dividends for shareholders, encourages firms to be efficient and to keep looking at cutting costs, high profit enables more recourses to invest in future projects+safeguards long-term success

Card 3

Front

Describe social/environmental concerns

Back

Preview of the front of card 3

Card 4

Front

what is profit satisficing

Back

Preview of the front of card 4

Card 5

Front

explain profit satisficing behaviour

Back

Preview of the front of card 5
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