MGTA notes

Business

Any legal activity undertaken for the sake of profit; an organized effort to create or provide something that people want.

Profit

The difference between revenue and expenses; the key reason for most businesses to exist.

Profit Motive

The incentive for business owners to increase their wealth by receiving gains from their efforts.

Liberalism

The idea proposed by Adam Smith that people are motivated to work hard and succeed without government interference.

Marxism

The philosophy developed by Karl Marx, stating that profit is the result of capitalists exploiting labor.

Entrepreneur

A person motivated to take risks and create a business.

Factors of Production

Basic building blocks used to produce anything, including natural resources, labour, and capital.

Labour

Human effort used in the production process, including workers and their skills.

Capital

Financial assets or money used to fund business operations; includes machinery and technology.

Natural Resources

Raw materials found in nature, used in the production of goods.

Consumer Products

Goods purchased by individuals for personal use.

Value Package

The bundle of tangible and intangible functions, features, and benefits that a business offers its customers.

Product Life Cycle (PLC)

Stages a product goes through from introduction to withdrawal in the market: Introduction, Growth, Maturity, Decline, and optionally, Withdrawal.

Monopoly

A market structure where one supplier dominates the entire market, controlling 100% of market share.

Oligopoly

A market structure characterized by a small number of large suppliers, where firms closely monitor and respond to one another's actions.

Market Economy

An economic system where individuals have the autonomy to start businesses, produce goods, and offer services driven by market forces.

Gross Domestic Product (GDP)

The total value of all goods and services produced within a country's borders.

Debt Capital

Money borrowed that must be repaid with interest; does not give lenders ownership in the business.

Equity Capital

Money received in exchange for ownership in a business; investors gain a stake and potentially share in profits.

Limited Liability

A legal principle ensuring that an investor's financial liability is limited to their investment in a company.

Sole Proprietorship

A business owned by a single individual who retains all profits and assumes all legal liabilities.

Corporation

A legal entity created by law, separate from its owners, with its own rights and responsibilities.

Market Structure

The organizational and competitive features of a market, characterized by the number of competitors, types of products, and market behavior.

Monopolistic Competition

A market structure where many sellers exist, but products are differentiated, allowing some market power.