demand

• what are factors affecting demand?

  consumer income, seasonality, marketing, trends, external shocks
• what is demand?


  the amount of good that consumers are willing and able to buy at a given price
• what are three examples of external shocks?

  earthquakes, war, pandemics
• what does PED stand for?

  price elasticity of demand
• if ped >1 then it's elastic
• if ped <1 then its inelastic
• what does PED measure?

  the responsiveness of demand to change in price
• PED values are always what?


  a minus
• how do you calculate PED?

  %change in quantity demanded/ % change in price
• how do you calculate change in price?

  price new- price old/ price old x 100
• does demand increase or decrease when price decreases?

  increases
• does demand increase or decrease when price increases?

  decreases
• what is elastic demand?


  demand for the product is sensitive to a change in price
• what is inelastic demand?


  there is little change in demand with a change in price
• give one example of elastic demand and why?

  fast food- if it gets more expensive the demand will decrease
• what products generally have inelastic demand?


  addictive products
• what does YED stand for?

  income elasticity of demand
• what does YED do?

  it estimates how demand will change given changes in consumer income
• what is the formula for YED?


  %change in quantity demanded/ %change in income
• what does YED measure?

  the responsiveness of demand to a change in income