supply, demand and taxation - unit one
- Created by: Anya kelly
- Created on: 18-05-13 11:58
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- effect of taxation
- if corporation tax rises
- = businesses will make less profit
- they may compensate by raising prices or going abroad
- = businesses will make less profit
- increased VAT
- = increased price of goods
- if income tax rises
- disposable incomes will fall
- = spending will also fall
- disposable incomes will fall
- exercise duties raised
- if the product is elastic demand will fall, if its inelastic it will stay the same
- e.g. cigarettes
- if the product is elastic demand will fall, if its inelastic it will stay the same
- if corporation tax rises
- supply and demand
- market deand
- the aggregate demand for all potential customers in a specific market at specific time
- market clearing point/equilibrium
- when demand and supply meet : TRUE EFFICIENCY - when there is no overproduction and no unsold items
- types of goods
- substitute good
- prod. similar to another prod.
- complementary good
- prod. that goes with another prod.
- inferior good
- prod. that you buy more of when you have lower income
- normal good
- prod that you buy more of with higher income
- business orientation
- product orientation
- designing a product based on innovation/quality
- market orientation
- designing a product based on the market needs
- product orientation
- substitute good
- market deand
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