Business Opportunities 2

  • Created by: lala2127
  • Created on: 03-06-19 14:14
View mindmap
  • Business Opportunities 2
    • Demand
      • Definition
        • amount of product consumers are willing to purchase
      • Factors
        • price
        • income
        • advertising
        • fashion
        • demographic
        • legislation
        • competitor price
    • Supply
      • Definition
        • amount of a product suppliers will offer to the market at a given price
      • Factors
        • raw materials cost
        • weather
        • technology advance
        • legislation
    • 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)
    • 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
    • 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
      • Secondary
        • advantages
          • efficient
          • no cost
          • background info
          • any information
        • disadvantages
          • no physical communication
          • may not be relevant
          • time consuming
    • 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
    • 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

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Marketing and competitive environments resources »