1. price determination in competitive markets Flashcards
factors shifting demand curve -decrease
-technological advancements lower demand for restaurants as apps such as Uber Eats and just eat continues to grow
-news papers are on the decline as online articles grow
factors shifting demand curve -increase
-due to covid, online stores see see a large rise in demand , Amazon announced a 200% increase in profits to $6.3 billion relative to the previous quarter in 2020
-demand for peleton in lock down rose as gyms shut. peleton revenues rose by 172% to $607 million during the period
price elasticity of demand-price elastic
motor vehicle providers have a large amount of competition so a rise in price will trigger a proportionally larger fall in demand
price elasticity of demand-price inelastic
electricity and water industries are natural monopolies and therefore have very few substitutes. the goods/services they provide are also necessities
price elasticity of demand-perfectly elastic
book stores, as they are now e-commerce and brick and motor, if they raised prices their demand would theoretically fall to zero. however, locations could be convenient (or they may have some non-price factors) which would stop demand falling so much
price elasticity of demand- perfectly inelastic
life saving drugs
factors affecting the shift in supply curve- decreasing
-December 31st 2020 the uk reached a trade deal both the EU , however there were still tariffs on uk imports and exports
-supply of housing can suffer from natural disasters
actors affecting the shift in supply curve- increasing
-innovation, such as in the early 200s, firms started getting the most out of ‘digital revolution’ which increased the efficiency of their supply chains
price elasticity of supply-inelastic
-housing in prime locations. green belts being put in place limits increases in supply and so makes them more inelastic.
-vapes/cigarettes due ti their addictiveness
