Business Opportunities 2
- Created by: lala2127
- Created on: 03-06-19 14:14
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- Business Opportunities 2
- Demand
- Definition
- amount of product consumers are willing to purchase
- Factors
- price
- income
- advertising
- fashion
- demographic
- legislation
- competitor price
- Definition
- Supply
- Definition
- amount of a product suppliers will offer to the market at a given price
- Factors
- raw materials cost
- weather
- technology advance
- legislation
- Definition
- Equilibrium
- supply and demand curve intersects
- Shifting the equilibrium
- change in non-price factor
- one curve will shift
- change in equilibrium, price and quantity
- Price Elasticity of Demand
- PED - Price Elastic
- luxuries
- holidays
- coffee
- Definition
- responsiveness of demand to change in price
- Price Elastic
- more responsive
- Price Inelastic
- less responsive
- PIED - Price Inelastic
- Necessities
- Medicine
- Staple Foods
- Percentage Change
- new value - old value / old value x 100
- Price Elasticity of Demand
- % change in quantity demanded / old value x 100
- results
- < 1 = price elastic
- >1 = price inelastic
- 0 = perfectly elastic (no change)
- PED - Price Elastic
- Income Elasticity of Demand
- Defentition
- responsiveness of demand to a change in income
- Income Elastic
- Income Inelastic
- YED - Income Elasticity of Demand
- % change in quantity demanded / % change in income x 100
- Types of Goods
- inferior
- e.g. supermarket coffee
- income increases = demand decreases
- normal
- income increases = demand increases
- luxury
- income increases = demand increases
- e.g. sports car
- inferior
- Defentition
- Market Research
- Selection Depends On...
- time
- cost
- size of business
- objectives
- Quantitative
- numbers
- closed questions
- multi-choice / scales
- advantages
- quick
- easy to analyse
- display results easily
- disadvantages
- limits information
- difficult to develop
- Qualitative
- words
- opinions and views
- open questions
- advantages
- in depth
- avoided pre-judgement
- interact with sample
- disadvantages
- difficult to analyse
- costly
- consistency between techniques
- Primary
- advantages
- quick
- detailed
- opinions heard
- disadvantages
- bias
- data quality
- costly
- sample size limit
- advantages
- Secondary
- advantages
- efficient
- no cost
- background info
- any information
- disadvantages
- no physical communication
- may not be relevant
- time consuming
- advantages
- Selection Depends On...
- Revenue, Costs and Profit
- fixed costs
- rent
- salary
- variable costs
- fuel used
- raw materials
- utility costs
- total costs
- fixed costs + variable costs
- Total Revenue
- money a business earns from selling
- quantity sold x price
- Profit
- total revenue - total costs
- fixed costs
- Break Even
- Break Even Output Level
- 1. contribution per unit = selling price - variable cost per unit
- 2. break-even output = total fixed costs / contribution per unit
- round number
- round up!
- Limitations
- assumes
- changing markets
- misleading
- Purpose
- predict profit
- seek finance
- inform price desicions
- Break Even Output Level
- Demand
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