supply, demand and taxation - unit one

HideShow resource information
View mindmap
  • effect of taxation
    • if corporation tax rises
      • = businesses will make less profit
        • they may compensate by raising prices or going abroad
    • increased VAT
      • = increased price of goods
    • if income tax rises
      • disposable incomes will fall
        • = spending will also fall
    • exercise duties raised
      • if the product is elastic demand will fall, if its inelastic it will stay the same
        • e.g. cigarettes
  • 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


No comments have yet been made

Similar Economics & Business Studies resources:

See all Economics & Business Studies resources »See all Production and Efficiency resources »