Edexcel A-level Economics Theme 3 Study Questions with Answers

Backwards vertical integration a joining together into one firm of two or more firms where the purchaser merges with/takes over one or more of its suppliers Conglomerate integration a joining together into one firm of two or more firms producing unrelated products Demerger when a firm splits into two or more independent businesses Divorce of ownership from control when managers and directors of a business are different from the owners of a business (the shareholders) Forward vertical integration a joining together into one firm of two or more firms where the supplier merges with/takes over one or more of its buyers Horizontal integration a joining together of two firms in the same industry at the same stage of production Niche market a small segment of a larger market Merger/integration the joining together of two or more firms under common ownership Not-for-profit organisations organisations that do not aim to make a profit; rather, they use any profit or surplus they generate to support their aims (eg. a charity) Organic or internal growth a firm increasing its size through investment in capital equipment/an increased labour force Private sector organisations organisations owned by individuals or companies rather than the state Public sector organisations organisations owned and controlled by the state