1.2.5 YED

Question 1

what is YED

Answer 1

the responsiveness of quantity demanded to a change in income over a specific period of time

Question 2

what is disposable income

Answer 2

amount of income available after all bills are payed, the higher this is the more we can charge

Question 3

how to calculate YED

Answer 3

percentage change in quantity demanded / percentage change in income

Question 4

what would a elastic good be classed as in YED

Answer 4

a luxury good

Question 5

what would an inelastic good be classed as in YED

Answer 5

a necessity

Question 6

how do reduce YED / make more inelastic

Answer 6

offer credit
decrease prices
gain customer loyalty
discount and sales
USP

Question 7

if YED is greater than 1, this means

Answer 7

its a luxury good

Question 8

if YED is lower than 1, this means

Answer 8

Normal good

Question 9

if YED is 0, this means

Answer 9

its an inferior good

demand falls as income rises
demand rises and income falls

Question 10

why may a business use YED

Answer 10

to forecast demand during economic growth or recession

help segment products by income sensitivity