1.2

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  • Created by: verityjoy
  • Created on: 29-02-24 15:55
a good is ____ when a rise in income leads to a DECREASE in demand
inferior
1 of 13
a good is ____ if a rise in income leads to an INCREASE in demand
normal
2 of 13
a negative YED coefficient mean that a good is
inferior
3 of 13
why does supply rise as price rises?
because higher prices signal higher profits to the firm, creating an incentive to expand
4 of 13
if the PED coefficient is over 1 it is
elastic
5 of 13
if the PED coefficient is between 0 and 1 it is
inelastic
6 of 13
factors that influence PED include
luxury/necessity
brand loyalty
availability of substitutes
7 of 13
non-price factors affecting demand
price of subsitutes/complementary goods
consumer income
tastes and preferences
branding/advertising
demographics
external shocks
season
8 of 13
non-price factors affecting supply
cost of production
external shocks
new technology
taxation
government subsidiaries
9 of 13
PED measures how much ____ responds to a change in ____
demand
price
10 of 13
when a product is price elastic, an increase in price will ____ revenue
decrease
11 of 13
when a product is price inelastic, an increase in price will ____ revenue
increase
12 of 13
YED measures how much ____ responds to a change in ____
demand
income
13 of 13

Other cards in this set

Card 2

Front

a good is ____ if a rise in income leads to an INCREASE in demand

Back

normal

Card 3

Front

a negative YED coefficient mean that a good is

Back

Preview of the front of card 3

Card 4

Front

why does supply rise as price rises?

Back

Preview of the front of card 4

Card 5

Front

if the PED coefficient is over 1 it is

Back

Preview of the front of card 5
View more cards

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