1.2 Flashcards
1
Q
What is the law of demand?
A
There is an inverse relationship between price and quantity
2
Q
What is effective demand?
A
If the customer has the willingness and ability to pay
3
Q
What can affect demand?
A
Substitutes, commentary products, income, changing tastes and preferences, seasonality
4
Q
What is perfectly elastic PED?
A
Any price increase will cause the demand to drop to zero
5
Q
What is perfectly inelastic PED?
A
Any price change wont affect demand
6
Q
What affects the elasticity of demand?
A
Type of good, percentage of income and time, income
7
Q
What is the equation for revenue?
A
Price per unit x quantity
8
Q
A
