Component 2 - Market Analysis

Question 1

Explain : What Quantitative and Qualitative research data is.

Answer 1

Quantitative : Numerical data, Used to analyse Market Trends and to assess the performance and competitiveness of a business.

Qualitative : Non-Numerical data based on opinions. Used to gain deeper insights into customer needs and behaviours.

Question 2

Calculate : price and income elasticity of demand

Answer 2

%Change in QD ÷ %Change in Price

Question 3

Explain : Numerical values of PED and YED

Answer 3

PED > 1 = Elastic —> Consumers are sensitive to changes in price
PED < 1 = inelastic —> Consumers are less Sensitive/Responsive to changes in price
PED = 1 = unitary

YED > 1 = Normal Demand —> Consumers will buy more of the good if incomes increase
YED < 1 = Inferior Demand —> Consumers will buy less of the good if incomes increase
YED = 0 = Zero change in QD to any changes in income