14- demand and supply and market forces Flashcards

1
Q

What are the determinants of supply?

A

Price
Competitors price
Tax
External shock

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2
Q

What are the determinants of demand?

A

Demographic change
Wealth/ income
Price
Advertising/ promotion

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3
Q

What is elasticity of demand?

A

how responsive demand is to change in price

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4
Q

What is the different between an elastic graph and an inelastic graph?

A

inelastic = steeper

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5
Q

How do you calculate elasticity of demand?

A

% change in demand / % change in price

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6
Q

What is the equilibrium point?

A

The price consumers demand concides with what the business is prepared to supply

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7
Q

What is effective demand?

A

The quantity that people in a market will and can purchase at each price
e.g. if the market price is low the demand will be higher

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