Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics Theme 2 > Firms, Consumers and Elasticies of demand > Flashcards

Firms, Consumers and Elasticies of demand Flashcards

1
Q

what is PED

A

The responsiveness of demand for a product to change in its price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what is the PED formula

A

% change in demand/ % change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is elastic?

A

greater than -1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what is inelastic?

A

less than -1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what determines PED?

A

availability of substitutes, time, luxuries and proportion of income spent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is YED formula?

A

% change In demand/ %change in income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what are normal goods?

A

Inelastic (0-1)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what are luxury goods?

A

elastic (more than 1)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What do inferior goods have?

A

a negative YED

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are habitual goods?

A

Alcohol/ cigarettes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is dynamic pricing?

A

Price fluctuates based on market conditions, needs big data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what is price skimming

A

High price when new product is launched and price changes over time e.g. apple products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what is competitive pricing?

A

Setting prices based on rivals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what is cost-plus pricing?

A

Prices are fixed by adding a % profit margin to average cost of production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is penetration pricing?

A

Very low prices for entering a new market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what is premium pricing?

A

Higher price than competitors to give the perception of a higher quality e.g. Bugatti that is £3million

17
Q

what is predatory/ destroyer pricing?

A

Price is so low that competitors are forced to leave the market

18
Q

what is price discrimination

A

Co ordinated on off/on peak times

19
Q

what is psychological pricing?

A

99p instead of £1

Economics Theme 2 (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions