1.2 Market Flashcards
1
Q
What are the factors that affect demand?
A
- Fashion + taste
- Advertising
- Population
- Seasonal factors
2
Q
What are the non-price determinantes of supply?
A
- Cost of production
- Technology
- Indirect tax
- Subsidies
- External shocks
3
Q
What is excess supply?
A
firms supply more than demand
goods are unsold
lower price to increase demand > sell goods
4
Q
What is excess demand?
A
consumers demand more than supply
firms increase price to drop demand
and will supply more if possible
5
Q
What is the equation for PED?
A
% change in Q demanded / % change in P
6
Q
What are the factors that determine PED?
A
- Brand loyalty
- Substitutes
- Income
- Luxury/Neccessity
- Time
7
Q
What is the equation for YED?
A
% change in Q demanded / % change in income
8
Q
What are inferior goods?
A
when incme increases, demand for good will decrease
links with YED
