Page 368 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Glossary

Price elastic demand the percentage change demand is greater Qualitative research the collection of information about
than the percentage change in price. consumer buying behaviour and their opinions about
Price elasticity of demand measures by how much demand products.
(sales) for a product changes when there is a change in Quality ensuring a good or service that meets the needs and
its price. requirements of its consumer.
Price inelastic demand the percentage change in demand Quality assurance a system of setting agreed standards for
(sales) is less than the percentage change in price. every stage of production.
Price leadership smaller firms set their price based on the price Quality circles groups of workers who meet regularly to discuss

set by the dominant firm in the industry. work-related problems.

Primary research the collection of first-hand data for the Quality control checking the quality of goods through

specific needs of the fi rm. inspection.
Primary sector firms whose business activity involves the Quality standards the minimum acceptable standard of

extraction of natural resources. production or service acceptable to consumers.

Private limited company often a small to medium-sized Quantitative research the collection of numerical data that can
company; owned by shareholders who have limited be analysed using statistical techniques.

liability. The company cannot sell its shares to the Quota a physical limit on the quantity of goods that can be
general public. imported and exported.
Private sector the part of the economy that is controlled by Redundancy termination of employment by the employer
individuals and companies for profi t. because the job is no longer needed.
Product the goods and services produced to satisfy a customer Resignation termination of employment by the worker, perhaps
need or want. because they have found a job with a diff erent employer.
Product life cycle the pattern of sales of a product from Retailer shops and other outlets that sell goods and services to
introduction to its withdrawal from the market. the fi nal consumer.

366 Product-orientated the firm decides what to produce and then Retained profi t profit remaining after all expenses, tax and

tries to find buyers for the product. dividends have been paid, which is then ploughed back into

Product quality the product meets the needs and expectations the business.
of customers. Retirement termination of employment due to the worker
Production the process of converting inputs such as land, reaching an age beyond which they do not need to work.
labour and capital into saleable goods, for example shoes and Return on capital employed (ROCE) ratio between profi t
cell phones. before tax and capital employed.
Productivity a measure of the efficiency of inputs used in the Revenue the amount a business earns from the sale of its

production process, especially labour and capital. products.
Profi t the difference between revenue and total costs. Salary fixed annual payment to certain grades and types of staff

Profit and loss section records expenses, interest payments, tax not based on hours worked or output.

and profi t. Sales promotion incentives used to encourage short-term

Profit margin % ratio between profit before tax and revenue. increases in sales or repeat purchases.
Profi t-sharing an additional payment to workers based on the Sample a representative sample of the target market selected to
profits of the business. take part in market research.

Promotion marketing activities used to communicate with Scarcity there are not enough goods and services to meet the
customers and potential customers to inform and persuade wants of the population.
them to buy a business’s products. Secondary research the collection of data from second-hand
Public corporation a business organisation that is owned and sources.

controlled by the state. Secondary sector firms that process and manufacture goods

Public limited company often a large company; owned by from natural resources.
shareholders who have limited liability. The company can sell Share issue source of permanent capital available to limited

its shares to the general public. liability companies.
Public sector the part of the economy that is controlled by the Shareholder a person or organisation who owns shares in a
state or government. limited company.