Canadian Business, Economics, and Market Structures: Key Concepts and Definitions

business

An organization that produces or sells goods and services to earn a profit.

profit

Revenues - Expenses; the reward for risk-taking in business.

What is the main goal of Canadian businesses?

To make profit, create jobs, pay taxes, and contribute to society.

What is a not-for-profit organization?

Provides goods/services but does not seek profit; surplus reinvested into mission (e.g., charities, schools, hospitals).

What is an economic system?

The way a nation allocates resources among citizens.

List the five factors of production.

Labour, Capital, Entrepreneurs, Natural Resources, Information.

Define command economy.

Government controls most/all factors of production and makes production decisions.

Difference between communism and socialism.

Communism → gov't owns all industries.Socialism → gov't owns major industries, smaller ones can be private.

Define market economy.

Individuals/businesses control factors of production; decisions based on supply & demand.

What is a mixed economy?

Combination of market + command; typical in most nations (e.g., Canada).

Define privatization

transfer of gov't activities to private sector.

deregulation

reduction of laws affecting businesses.

List the roles of government in business.

Customer, Competitor, Regulator, Taxation Agent, Provider of incentives, Provider of essential services.

Give an example of government as a customer.

Buys infrastructure, office supplies, or military equipment.

Give an example of government as a competitor.

Crown corporations (e.g., Canada Post, Hydro-Québec).

Why does government regulate business?

To protect competition, consumers, social goals, and the environment.

How do businesses influence government?

Lobbying, trade associations, persuading voters.

Define demand.

Willingness + ability of buyers to purchase goods/services.

Define supply.

Willingness + ability of producers to sell goods/services.

What is equilibrium price?

Where supply = demand.

What happens in a surplus?

Supply > demand → wasted goods, falling prices.

What happens in a shortage?

Demand > supply → lost profits, higher prices.

Real-world example of demand-supply shift?

Oil prices crashed during COVID-19 due to demand collapse.

What are the 4 elements of private enterprise?

Private property, Freedom of choice, Profits, Competition.

Define perfect competition.

Many small firms, identical products, no control over prices (e.g., wheat farming).

Define monopolistic competition.

Many firms, product differentiation, some price control (e.g., clothing, coffee shops).

Define oligopoly.

Few large firms dominate; entry is difficult; prices similar (e.g., Canadian banking, auto industry).

Define monopoly.

One seller, full control of price (e.g., Canada Post for letters).

What is supply management in Canada?

Gov't limits production quotas in dairy, eggs, poultry, maple syrup → high tariffs protect domestic producers.