Principles of Business Economics for Companion Animal Enterprises

Economic Indicators

Measurements that help understand changes in the economy, impacting customer demand, costs, and financing conditions.

Inflation

A sustained increase in the general price level of goods and services over time.

Demand-pull inflation

Inflation driven by rising overall spending faster than the economy’s ability to produce goods and services.

Cost-push inflation

Inflation resulting from key input costs becoming more expensive, leading businesses to raise prices.

Inflation Rate Calculation

A percentage change showing how much the price of an item has increased over a time period.

Interest Rates

The price paid for using money, expressed as a percentage; affects borrowing and saving.

Nominal Interest Rate

The stated interest rate on a loan without adjusting for inflation.

Real Interest Rate

The nominal interest rate adjusted for inflation, indicating the actual cost of borrowing.

Unemployment

The share of people who want work but do not have jobs.

Economic Downturn

A period when unemployment rises and consumer spending typically decreases.

Price Elasticity of Demand

The sensitivity of quantity demanded to a change in price, calculated as the percentage change in quantity demanded divided by the percentage change in price.

Elastic Demand

When a price increase leads to a significant drop in quantity demanded.

Inelastic Demand

When quantity demanded does not significantly change despite a price increase.

Domestic Competition

Rivalry among businesses operating within the same country or region.

International Competition

When domestic businesses compete with imported goods or services.

Sustainability

Meeting present needs without compromising the ability of future generations to meet theirs.

Triple Bottom Line

A framework considering economic, social, and environmental performance in business decisions.

Externality

A cost or benefit of an economic activity that affects people not involved in the transaction.

Negative Externality

A cost imposed on others due to an economic activity.

Positive Externality

A benefit received by others from an economic activity.

Cost Control

Efforts by a business to streamline operations to maintain profitability.

Differentiation

Competing on features other than price, such as quality or customer service.

Market Segmentation

Targeting a specific segment of customers rather than competing for all customers.

Sourcing and Product Design

Making decisions about ingredient sourcing, packaging, and product durability for sustainability.

Facility Management

Practices within service businesses to optimize resource use and ensure efficiency.

Labor and Community Responsibility

Ensuring fair practices and community support as part of a sustainable business model.