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1.2 the market, calculations - Coggle Diagram
1.2 the market
income elasticity of demand
if income changes, how much does demand change
can be positive or negative
for example 1 means that for every 1 percent income changes demand changes 1 percent the same direction
luxury goods
highly positive yed
normal goods
slightly positive yed
inferior goods - negative yed
price elasticity of demand
if price changes how much does demand change
elastic +1
inelastic less than one
PED figures will always be negative
if PED -2 this means that for every price change demand will fall by 2 percent
demand
quantity wiling or able to be pu
prices goes up demand goes down
factors affecting demand
price of substitute good and complementory goods
Income levels - ability to purchase
Tastes fashion and trends
Advertising
Sesonality
supply
quantity willing or able to be suplied by a business
price lower = stock is lower
factors affecting supply
changes of cost of production
technology can lead to cheaper supply
Goverment support
markets
if consumers most likely affected demand
if business supply is likely to change
calculations
market share
market growth
mark up pricing
