What causes a shift in demand
Advertising, fasion and trends; Population and age structure; Seasons; Income (normal vs inferior); Price of other good (compliment vs substitute
What does PED measure
How much a change in price will affect demand
What is the PED formula
% change in quantity demanded / % change in price
What PED figure determines elastic demand
Less than -1
What PED figure determines inelastic demand
-1 to 0
What is unitary elasticity (PED)
-1
What is perfectly inelastic (PED)
0
What is the percentage change formula
((new-old)/old) x 100
What are factors that affect PED
Substitutes; Adiction; Proportion of income; Time period (short vs long term)
What is the YED formula
% change in quantity demanded / % change in income
What YED = Normal necessity
0-1
What YED = Normal luxury
1+
What YED = inferior
Less than 0
What are the factors that affect YED
YED is influenced by any factors in an economy which change the wages or salaries of workers
What is the XED formula
% change in quantity demanded of good A / % change in price of good B
What XED = complimentary good
Less than 0
What XED = substitute
more than 0
What is the definition of demand
Demand is the amount of a good/service that a consumer is willing and able to purchase at a given price in a given time period
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Demand18
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Supply8
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Introduction to economics33
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Consumer and producer surplus7
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Taxes and subsidies9
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Market failure and government intervension16
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Revenue, cost and profit28
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Efficiencies7
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Market structures27
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Buisness objectives and growth32
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Regulation and competition policy29
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Labour markets20
