Cambridge International as and a level Economics Ebook

small and medium enterprises
(SMEs)
are an 
important engine of growth for the economy.
Small and medium enterprises (SMEs): 
firms with fewer 
than 250 employees; small firms have fewer than 50 employees.
KEY TERM
The Industry
In a competitive market structure, the 
industry
is simply 
the sum of all the fi rms making the same product. Th
is is 
the total market supply. In other markets, the industry is 
taken to be the total number of fi rms producing within the 
same product group, i.e., things that are close substitutes 
for each other. It is sometimes diffi
cult to draw the line 
between diff erent industries; for example, are motor cars 
and motorcycles in the same product group? In reality 
many multi-product fi rms operate in more than one 
industry at the same time. A 
multinational corporation 
(MNC)
can be in several industries across the global 
economy. A particularly good example is the Indian-
owned Tata Group, which has global interests in steel, 
vehicle production, upmarket hotels, tea production, 
telecommunications and electronics. Another is Nestlé, 
which produces a wide range of food and confectionery 
products worldwide.
Industry: 
all firms making the same product or in the same 
line of business.
Multinational corporations (MNCs): 
firms that operate in 
diff erent countries.
KEY TERMS
Th
e industry is therefore a collection of business 
organisations that supply similar products to the market. 
When a fi rm’s market share is discussed it tends to be in 
terms of the sales of the fi rm as a percentage of the total 
sales of all fi rms in the industry. Th
e terms ‘industry’ and 
‘market’ are interchangeable in this context.
Tata Group companies