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Business A Level > 3.3 > Flashcards

3.3 Flashcards

1
Q

What is PED?

A

Price Elasticity of Demand, measures the responsiveness of demand to a change in price

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2
Q

What is YED?

A

Income Elasticity of Demand, measures the responsiveness of demand to a change in income

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3
Q

What is price elastic?

A

A good where a change in price will cause more than proportional change in the quantity demanded

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4
Q

What is price inelastic?

A

A good where a change in price will cause a less than proportional change in the quantity demanded

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5
Q

What is elasticity of demand?

A

The correlation between price and the quantity demanded

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6
Q

What is the calculation for PED?

A

Percentage change in quality demanded / percentage change in price

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7
Q

What is the PED value for price elastic?

A

PED value greater than -1

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8
Q

What is the PED value for inelastic?

A

PED value between 0 and -1

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9
Q

What are factors affecting elasticity?

A

The number of substitutes,
Whether the food is a necessity or a luxury,
Brand loyalty

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10
Q

What is an example of what happens if a product is price elastic?

A

If price goes up, demand falls dramatically

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11
Q

What is an example of what happens if a product is price inelastic?

A

If price goes up, demand falls just a little

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12
Q

What are the market research types?

A

Qualitative, quantitative, primary, secondary

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13
Q

What is primary research?

A

Research conducted firsthand for a specific purpose

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14
Q

What is secondary research?

A

Research using existing resources like government sources, trade publications and market reports

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15
Q

What are the methods of sampling?

A

Stratification, quota, random

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16
Q

What is market mapping?

A

A method to identify gaps in the market

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17
Q

What is the formula for percentage change?

A

Difference (new-old) / original * 100

18
Q

What are addictive goods?

A

Goods that may have inelastic demand, for example cigarettes

19
Q

What are necessity goods?

A

Goods that typically have inelastic demand, example milk

20
Q

What is brand loyalty?

A

High brand loyalty can lead to inelastic demand

21
Q

What is elastic demand?

A

Demand changes significantly with price changes

22
Q

What is inelastic demand?

A

Demand changes minimally despite price changes

23
Q

What does it mean when a product is relatively elastic?

A

Demand is somewhat responsive to price changes

24
Q

What does it mean when a product is relatively inelastic?

A

Demand is generally unresponsive to price changes

25
Q

What does equilibrium price mean?

A

Price where supply equals demand

26
Q

What are normal goods?

A

Demand increases as income rises

27
Q

What are luxury goods?

A

Demand and increases significantly with income increases

28
Q

What are inferior goods?

A

Demand decreases as income rises

29
Q

What is positive YED?

A

Demand rises with increasing income

30
Q

What is negative YED?

A

Demand falls with increasing income

31
Q

What is inelastic YED?

A

Demand changes less than income changes

32
Q

What is elastic YED?

A

Demand changes more than income changes

33
Q

What is sales forecasting?

A

Analysing trends to predict future sales

34
Q

What is financial planning?

A

Planning based on future income and sales

35
Q

What are substitutes?

A

Alternative products affecting demand elasticity

36
Q

What are cost cutting measures?

A

Strategies to reduce expenses during declining sales

37
Q

What is a price increase strategy?

A

Used when demand is price inelastic

38
Q

What is the market clearing price?

A

Price at which all goods are sold

39
Q

What is consumer income change?

A

Impact on quantity demanded for various goods

40
Q

What is loyalty impact?

A

Brand loyalty affects demand elasticity

Business A Level (3 decks)

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