1.2 Market

HideShow resource information
Demand
The amount of a product that consumers are willing and able to purchase at any given rate.
1 of 15
Factors leading to a change in demand
Price of substitutes; Adverts and Branding; Price of complements; Demographics; Change in consumer incomes; External Shocks; Fashion, Taste and Preferences; Seasonality
2 of 15
Supply
The quantity of a product that firms are willing to supply at any given price level in a given time period.
3 of 15
Which way does the Demand Curve slope?
Downwards from left to right.
4 of 15
Factors leading to a change in supply
The cost of production; New Technology; Indirect taxes such as VAT; External Shocks.
5 of 15
Equilibrium
A state of equality between market demand and market supply.
6 of 15
Diequilibrium
Prices where supply and demand are out of balance.
7 of 15
Surplus
When supply exceeds demand.
8 of 15
Shortage
When demand exceeds supply.
9 of 15
Which way does the Supply Curve slope?
Upwards from left to right.
10 of 15
Price Elasticity of Demand (PED)
The measure of how responsive demand is to a change in price.
11 of 15
Formula of PED
%Change in quantity demanded/ %Change in price
12 of 15
Values of Price Elasticity
(-)1+ is elastic. If the number is smaller than 1 it's inelastic.
13 of 15
Price Elastic Demand
Demand is sensitive to price changes.
14 of 15
Price Inelastic Demand
Demand is not so sensitive to price changes.
15 of 15

Other cards in this set

Card 2

Front

Price of substitutes; Adverts and Branding; Price of complements; Demographics; Change in consumer incomes; External Shocks; Fashion, Taste and Preferences; Seasonality

Back

Factors leading to a change in demand

Card 3

Front

The quantity of a product that firms are willing to supply at any given price level in a given time period.

Back

Preview of the back of card 3

Card 4

Front

Downwards from left to right.

Back

Preview of the back of card 4

Card 5

Front

The cost of production; New Technology; Indirect taxes such as VAT; External Shocks.

Back

Preview of the back of card 5
View more cards

Comments

No comments have yet been made

Similar Business Studies resources:

See all Business Studies resources »See all Markets resources »