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Economic Influences - Coggle Diagram
Economic Influences
Inflation
A general rise in prices or a fall in the value o money - shows how prices have changed + indication of the cost of living
high inflation - passed onto consumers - if price inelastic
business absorb the increased costs - lower profit margins - impacts pricing strategy
some may reduce supply - capacity reduced - focus on cost minimization - demand will fall - less competitive
Retail Price Index - measurement of a basket of goods of services representative of what people buy
Consumer Price Index - similar but excludes housing costs
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