1.2 Flashcards
what is demand
The amount of customers that are willing and able to buy a product at a set price at a given time.
demand curve
Examples of demand factors
price, social trends, lifestyle choices, consumer income, competitors
supply curve
what is supply
supply is the amount of goods or services a producer is able or willing to sell at any given price
examples of supply factors
cost of materials, technology advances, economic crash, social trends, exclusivity
what is income elasticity of demand (yed)
a measure of the responsiveness of demand to a change in income, increase in income increase demand
what is the formulae for YED
% change in demand ÷ % change in income
what is price elasticity of demand
a measure of the responsiveness of demand to change in price,
negative ped= 0 and below
positive ped= 1 and above
what is the formulae for ped
% change in demand ÷ % change in price
market equilibrium
change in demand curve
change in supply curve
