Business plan definition tutor2u economics

In the contraction phase, GNP declines. During prosperity, most of the sectors or industries experience an increase in output and during recession they experience a fall in output. Temporary discount pricing strategies include coupons, cents-off sales, seasonal price reductions and even volume purchases.

Definition of Inflation

During recovery, increase in output of consumer goods usually precedes that of investment goods. Instead, the company will use the quick spurts of cash to finance additional product production and advertising.

Employment of more labour and capital causes GNP to rise. Following are the main features of trade cycles: Once the business is up and running, franchisers continue to monitor and guide the franchisee so business plan definition tutor2u economics the franchisee may achieve success.

Unsold goods pile up because of low household demand. Since their timing changes rather unpredictably, business cycles are not regular or repeating cycles like the phases of the moon. A small company will work hard to serve these customers to build brand loyalty among them.


The biggest decline in the purchasing power of the dollar occurred in the s when inflation was highest. Eventually, this contracting economy hits the slump again. It is useful metric used by marketing managers especially at a time of acquiring a customer.

For example, when people purchase paper plates or foam cups or a picnic, they often shop for the lowest price when there is minimal product differentiation.

During prosperity, existing capacity of plants is overutilised. Now plants get utilised in a better way. It is a very important metric and is used while making important decisions about sales, marketing, product development, and customer support.

Thus, an air of pessimism engulfs the entire economy and the economy lands into the phase of depression.

Definition of a Franchise Business

Meanwhile, a rise in aggregate demand and cost leads to a rise in both investment and price level. Thus, spending spree starts, of course, hesitantly. Labour and raw material shortages develop.

Consequently, a small paper company may need to price its products lower or lose potential sales. A good transport system to take the goods into different geographical areas. Inflation means an increase in the cost of living as the price of goods and services rise.

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Pessimism that once prevailed in the economy now makes room for optimism. Fluctuations in the prices of agricultural products are more marked than those of prices of manufactured articles. However, the seeds of recovery of the economy lie dormant in this phase.

Definition of Pricing Strategy

Competitive-Based Pricing There are times when a small company may have to lower its price to meet the prices of competitors. This was due to rising oil prices and rising wages. Once the forces of revival get strengthened the level of economic activity tends to reach the highest point—the peak.

A volume discount may include a buy-two-get-one-free promotion.

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Distribution is critical for any type of industry or service. A competitive-based pricing strategy may be employed when there is little difference between products in an industry. Thus, the recovery of consumer goods industries from recessionary tendencies is quicker than that of investment goods industries.

Between trough and peak, the economy grows or expands. Increased production leads to an increase in demand for inputs.A-level economics revision guides and question banks covering labour markets, supply and demand, market structure and all core economics a-level topics.

May 15,  · Create your citations, reference lists and bibliographies automatically using the APA, MLA, Chicago, or Harvard referencing styles. It's fast and free! Jun 30,  · The pricing strategy you choose for your business depends on factors such as your costs, your competitors' pricing and where your product sits in its life cycle.

Suttle, Rick. "Definition. Definition of 'Monopoly' Definition: A market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute.

Free business environment papers, essays, and research papers. IGCSE Business Studies. Key Revision Booklet Includes key definitions plus key facts which must be learnt for the IGCSE Business Studies Exam Source: Mrs O’Dolan’s Notes, Tutor2U & BBC BiteSize.

Business plan definition tutor2u economics
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