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1.2, Behavioural economics - Coggle Diagram
1.2
Price Elasticity of Supply
The responsiveness of supply to a change in price
PES=percentage change in quantity demanded/percentage change in price
BRITS
Barriers to entry
Resources
Inventory
Time
Spare capacity
Why don't consumers act rationally
Habitual behaviour
Herd mentality
Computational weaknesses
Demand
The quantity of a good or service that consumers are willing to buy at a given price
Diminishing marginal utility:
Each extra unit of consumption leads to falling levels of satisfaction
PASIFIC
Advertising
Subsitutes
Population
Income
Fashion
Interest rates
Complements
Price Elasticity of Demand
The responsiveness of demand to a change in price
PED=percentage change in quantity demanded/percentage change in price
PLANTS
Proportion of income
Loyalty
Addictiveness
Necessities
Time
Substitutes
Supply
The quantity of a good or service that producers are willing to sell at a given price
PINTSWC
Number of firms
Technology
Indirect taxes
Subsidies
Productivity
Weather
Cost of production
Behavioural economics