KT5: 1.2.4 PED, 1.2.5 YED Flashcards
1
Q
External constraint
A
something outside the firms control that prevents it from achieving its objectives
2
Q
Predatory pricing
A
pricing low with the deliberate intention of driving a competitor out of business
3
Q
Price-elastic
A
a product with demand that is highly price sensitive, so elasticity is above 1
4
Q
Price- inelastic
A
a product that is not very price sensitive, so price elasticity is below 1
5
Q
Negative income elasticity
A
a product for which sales fall when people are better off (but rise when people are worse off)
6
Q
Positive income elasticity
A
a product for which sales rise when people are better off (but fall in recessions)
7
Q
Recession
A
two or more quarters of negative economic growth
