1.2 The market

Question 1

Define demand?

Answer 1

The want or the need the public have for a product or a service.

Question 2

What is 4 factors that can affect demand for a product?

Answer 2

Fashion/popular at the time, Price of the product, Consumer spending power, Advertisement.

Question 3

What is the definition of supply?

Answer 3

The quantity at which the product is being provided at.

Question 4

What are 4 factors that will affect the supply for a product?

Answer 4

Suppliers’ relationship, Technology, Weather, Employees production rates.

Question 5

Define PED (Price elasticity of demand)

Answer 5

The responsiveness of the demand for a good when there is a change in price.

Question 6

Define YED (Income elasticity of demand)

Answer 6

The responsiveness of demand when there is a change in income.

Question 7

How do you calculate PED?

Answer 7

% change in quantity demanded / % change in price

Question 8

How do you calculate YED?

Answer 8

% change in demand / % change in income