Carla Has Just Started a Business and Is Asking Herself

question 29

Multiple Choice

Carla has just started a business and is asking herself the following question. Where do I want my business to be in five years? Carla is in the process of

• A) analyzing her financial requirements.
• B) establishing the basic control functions for her business.
• C) establishing basic parameters for her business.
• D) determining how to write a functional plan.
• E) developing a strategic plan.

Understand the concept of economic profits and losses in perfectly competitive industries.

Comprehend the reasons and conditions under which firms enter or exit an industry.

Identify how shifts in demand and supply affect market equilibrium and firms' economic profits in the short and long run.

Recognize the characteristics and implications of increasing-cost, decreasing-cost, and constant-cost industries on the industry's supply curve and market prices.

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Definitions:

Inventory Level

The quantity of goods or materials on hand at any given time within a business.

Trade Promotions

Marketing activities undertaken to increase demand among wholesalers, retailers, or other organizational buyers, usually through discounts or incentives.

Retailer

A business or individual that sells goods to the public in relatively small quantities for use or consumption rather than for resale.

Manufacturer

A person or company that makes goods for sale, especially on a large scale, involving processes such as designing, testing, and mass-producing products.