External Environment

• What are the four main factors influencing demand mentioned in the study material?

  Influence, Competition, Costs, Demand
• How does high demand relate to price elasticity of demand (PED)?

  High demand is often associated with elastic demand, meaning it is sensitive to price changes
• What does limited demand indicate about price elasticity of demand (PED)?

  Limited demand indicates inelastic demand, meaning it is not sensitive to price changes
• What industry is mentioned as having high unemployment due to seasonality?

  Hospitality
• How do market conditions affect wages for skilled staff?

  Market conditions can influence the supply of workers, which in turn affects wages
• What is the relationship between incomes and labor costs in the economy?

  As incomes rise, labor costs typically increase
• During which months is demand typically higher in certain industries?

  Summer months
• How do low interest rates affect consumer debt and incomes?

  Low interest rates can lead to increased consumer debt and higher incomes
• What does a luxury good indicate about its income elasticity of demand (YED)?

  A luxury good has a YED greater than 1
• How do cheaper loans affect demand?

  Cheaper loans increase demand
• What is the effect of high interest costs on consumer behavior?

  High interest costs provide an incentive to save
• How does immigration affect the supply of workers in the UK?

  Immigration increases the supply of workers in the UK
• What demographic factor is mentioned as influencing wages?

  The ageing population
• How do environmental issues like Fairtrade affect costs and demand?

  Fairtrade and ethical considerations can increase costs but also boost demand
• What are the key factors affecting demand in the market?

  • Influence
  • Competition
  • Costs
  • Demand
• What are the implications of high and limited demand on price elasticity of demand (PED)?

  • High demand: Elastic demand (sensitive to price changes)
  • Limited demand: Inelastic demand (not sensitive to price changes)
• What are the economic factors influencing labor costs and wages?

  • Market conditions
  • Incomes
  • Supply of workers
• How do interest rates affect consumer behavior and demand?

  • Low interest rates: Increase consumer debt and demand
  • High interest costs: Incentive to save
• What role do demographic factors play in the labor market?

  • Immigration increases supply of workers
  • Ageing population affects wages and demand in certain industries
• How do environmental issues impact market dynamics?

  • Fairtrade and ethical considerations can increase costs
  • They can also boost demand for ethically sourced products