Flashcard Quiz Question And Answers
What is the basic law of demand ?
Demand that varies inversely with price. Lower the price the more affordable it is for customers.
What is the demand curve?
The amount demanded of a product in the market at different price points. This can be seen on the demand and supply graph.
What is the basic law of supply?
When the selling price of a product rises, businesses will expand supply to the market.
What are the causes for market change ?
1- Cost of production
2- External shocks
3- New technology
4- Taxation and subsides
What is meant by a subside?
A subside is a form of financial income. This is where the government will give a firm a small amount of money to invest in the firm.
What is equilibrium?
This is where there is a balance between demand and supply.
What happens when demand increases?
When demand increases the supply needs to increase to keep up with this.
What happens when supply increases?
A increase in supply is normally due to and increase in demand. The increase in supply is done so the firm can keep up with the demand.
Price elastic ?
The change in demand is more than the change in price .
What is price in elastic ?
The change is demand is less than the change in price.
Unitary price elasticity what is it?
Where the change in demand and change in price are equal.
Things that effect ped?
Brand strength Necessity Habit Availability of substitutes Time.
What is habit?
Products that are demanded and consumed as a process of habit.
Necessity
Products that are a necessity for a person.
What is the calculation for price elasticity of demand?
%change in quantity demanded
———-—————————————-
%change in price
