Topic 2 key words 0.0 / 5 ? Business StudiesEconomic growthA2/A-levelEdexcel Created by: Alexandra_GraceCreated on: 08-05-16 19:19 Demand The amount society is willing and able to buy at a set price at a given point in time 1 of 13 Supply The amount of a product that producers are willing and able to sell at any given price 2 of 13 Normal Good If price rises, demand falls - there is a negative correlation and a positive YED 3 of 13 Inferior Good If income increases, demand decreases - there is a positive YED 4 of 13 Complimentary Goods Two or more products bought alongside each other 5 of 13 Necessities It is less likely demand will change regardless of income 6 of 13 Luxuries If income increases, demand is likely to increase 7 of 13 Price Elasticity of Demand (PED) Responsiveness to price increase or quantity demanded decrease 8 of 13 Income Elasticity of Demand (YED) Responsiveness to quantity demanded increase or income increase 9 of 13 External Shocks Unexpected events outside of the business' control which effects demand 10 of 13 Seasonality Demand fluctuations depending on the time of year 11 of 13 Indirect Taxes Tax placed on goods and services on individual firms eg. VAT 12 of 13 Subsidies Finance provided by the government to encourage production as it is cheaper to produce a product 13 of 13
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