Price Elasticity Test

Question 1

Price elasticity of demand

Answer 1

Measures how responsive the demand is to change in the price, all of the factors constant

Question 2

Income elasticity of demand

Answer 2

This is how responsive the demand is to changes in income, all other factors are constant

Question 3

Price elastic

Answer 3

Means that the demand for a product is sensitive to changes in price. ( not good to move the price around )The percentage change in quantity is is greater than the percentage change in price

Question 4

Price in elastic

Answer 4

Means that the demand for a product is not very sensitive to changes in price. (Customers won’t be affected if the price is changed around) The percentage change in quantity is less than the percentage change in price

Question 5

Market research

Answer 5

Is gathering analysing and producing information about the specific market. For example profile and number of customers in the market and analysis of competitors already operating in the market

Question 6

Target population

Answer 6

Isall the items or people that are relevant to the market being undertaken for example a business might be interested in all 16 to 18-year-olds in the UK

Question 7

Primary research or Field research

Answer 7

Collection of first-hand original data that did not exist before

Question 8

Secondary research or desk research

Answer 8

Is research that has already been undertaken by other organisations

Question 9

Quantitive research

Answer 9

Is research that produces new local data e.g. sales figures or percentages

Question 10

Qualitative research

Answer 10

Research that produces non-numerical data in forms of words such as Ideas feelings emotions or suggestions

Question 11

Sample

Answer 11

It’s a subgroup of the target population people selected for the sample must be representative of the entire target population

Question 12

Focus group

Answer 12

Is a small sample of people representative of the entire target population selected to provide qualitative data for example to brainstorm a business or product name

Question 13

Market mapping

Answer 13

Analyses market conditions to identify the position of one product or brand relative to others in the market in terms of given criteria

Question 14

Correlation

Answer 14

Statistical technique to establish the strength of the relationship between two sets of values

Question 15

Extrapolation

Answer 15

Using previous patterns of new local data in order to predict values in the future

Question 16

Confidence level

Answer 16

Is the probability that the research findings are correct

Question 17

Confidence interval

Answer 17

Is the possible range of outcomes for a given confidence level for example you may have a 95% confidence level of the sales will be between 500,000 and £700,000

Question 18

Big Data

Answer 18

Refers to the large and complex data sets. This has been difficult to analyse in the past but improvements in technology is making the use of big data more feasible