Content Guidance 2 Flashcards
What is data analysis
Turning raw data into helpful information that can be used in other business situations
What are 3 methods if data analysis
1 pie charts - type of graph where a circle is divided into sectors to represent parts of the whole
2 histograms - made up of rectangles whose area is proportional to how often a variable occur in a set of data
3 index numbers - a figure that shows thee price or quantity compared with a starting point known as the base value 9base value normally starts at 100)
What is market analysis
The process of collecting information about the market the business is operating in to create effective objectives to ensure success
Give examples of market analysis
1 collecting information on the size of the market
2 the business relative market share
3 political background to the market
What are the 2 categories of data used y a business
1 quantitative- numbers
2 qualitative - views and opinions
What is price elasticity of demand (PED)
Measure the responsiveness of demand after a chang in price
What is the formula for PED
% change in quantity demand/% chang in price
How can PED be used
To give a business an indication of how sensitive or elastic its products are to change in price
What are he values of PED
1 if PED =0 or less demand is perfectly inelastic - demand does not change when price changes , The demand curve will be vertical
2 If PED is between 0-1 the % change in demand from the 1st to the 2nd level of demand is smaller than the % change in the price - demand is inelastic
3If PED =1 it means the % change in demand is exactly the same as the % change in price - demand is unit elastic . The % rise in price of the product would lead to exactly the same % fall in demand leaving total spending on the product the same at each price level
4. If PD is 1 or more - the demand is very sensitive to the price of the product - demand is elastic - a % rise in the product price means a bigger fall in demand for the product
