ECONOMICS

o Diversification: A diversified company owns or operates in

several unrelated business segments. companies diversify
to achieve greater profitability. The Walt Disney Company
is a diversified global entertainment company that
operates theme parks, resorts, broadcast networks, and
streams TV shows and movies. Nestle is eyeing to diversify
its offering into new categories such as pet care, cereals,
skin health and premium coffee business.
o Perfectly competitive market: The market for milk closely
represents perfect competition. All milk suppliers produce
the same good and the price is controlled.
Rice,Salt,Sugar,Water.
o Information symmetry: A condition in which all relevant
information is known to all parties involved. Consumers
and producers have the same level of knowledge about
the products, and they know everything there is to know
about them and the effects of consuming them.Ex-1)The
estate agent, who exploits the fact that a potential buyer
of a property has very little knowledge about the property,
and any possible problems. 2)The cigarette manufacturer,
who does not inform smokers of the true health risk of
smoking. Remedies-Employers may be forced to request
that job applicants disclose information about themselves,
such as whether they have a criminal record.
o Very few to no barriers to entry or exit: A barrier to entry
is something that blocks or impedes the ability of a
company (competitor) to enter an industry. A barrier to
exit is something that blocks or impedes the ability of a
company (competitor) to leave an industry.
o A great example of competitive market is farming. There
are thousands of farmers and not one of them can
influence the market or the price based on how much they
grow. All the farmer can do is grow the crop and accept
whatever the current price is for that product.
o Which country is a good example of a mixed economy?
-Countries like England, France, and India follow the mixed
economic system where both, the state and private
players, have control over the resources of distribution.
o A command economy is one in which a centralized
government controls the means of production and
determines output levels. Cuba, North Korea and the
former Soviet Union.
o The activity in a market economy is unplanned. It is not
organized by any central authority but is instead
determined by the supply and demand of goods and
services. The United States, and Japan are all examples of
market economies. A market economy is a type of
economic system where supply and demand regulate the
economy, rather than government intervention.
o Land refers to physical land, such as the acres used for a
farm or the city block on which a building is constructed.
 Labor refers to all wage-earning activities, such as the
work of professionals, retail workers, and so on.
Entrepreneurship refers to the initiatives taken by
entrepreneurs, who typically begin as the first workers in
their firms and then gradually employ other factors of
production to grow their businesses. Finally, capital refers
to the cash, equipment, and other assets needed to start
or grow a business. Land- Rent, Labour-Wages, Capital-
Interest, Entrepreneurship-Profit.
o