3.3

Question 1

What is PED?

Answer 1

Price Elasticity of Demand, measures the responsiveness of demand to a change in price

Question 2

What is YED?

Answer 2

Income Elasticity of Demand, measures the responsiveness of demand to a change in income

Question 3

What is price elastic?

Answer 3

A good where a change in price will cause more than proportional change in the quantity demanded

Question 4

What is price inelastic?

Answer 4

A good where a change in price will cause a less than proportional change in the quantity demanded

Question 5

What is elasticity of demand?

Answer 5

The correlation between price and the quantity demanded

Question 6

What is the calculation for PED?

Answer 6

Percentage change in quality demanded / percentage change in price

Question 7

What is the PED value for price elastic?

Answer 7

PED value greater than -1

Question 8

What is the PED value for inelastic?

Answer 8

PED value between 0 and -1

Question 9

What are factors affecting elasticity?

Answer 9

The number of substitutes,
Whether the food is a necessity or a luxury,
Brand loyalty

Question 10

What is an example of what happens if a product is price elastic?

Answer 10

If price goes up, demand falls dramatically

Question 11

What is an example of what happens if a product is price inelastic?

Answer 11

If price goes up, demand falls just a little

Question 12

What are the market research types?

Answer 12

Qualitative, quantitative, primary, secondary

Question 13

What is primary research?

Answer 13

Research conducted firsthand for a specific purpose

Question 14

What is secondary research?

Answer 14

Research using existing resources like government sources, trade publications and market reports

Question 15

What are the methods of sampling?

Answer 15

Stratification, quota, random

Question 16

What is market mapping?

Answer 16

A method to identify gaps in the market

Question 17

What is the formula for percentage change?

Answer 17

Difference (new-old) / original * 100

Question 18

What are addictive goods?

Answer 18

Goods that may have inelastic demand, for example cigarettes

Question 19

What are necessity goods?

Answer 19

Goods that typically have inelastic demand, example milk

Question 20

What is brand loyalty?

Answer 20

High brand loyalty can lead to inelastic demand

Question 21

What is elastic demand?

Answer 21

Demand changes significantly with price changes

Question 22

What is inelastic demand?

Answer 22

Demand changes minimally despite price changes

Question 23

What does it mean when a product is relatively elastic?

Answer 23

Demand is somewhat responsive to price changes

Question 24

What does it mean when a product is relatively inelastic?

Answer 24

Demand is generally unresponsive to price changes

Question 25

What does equilibrium price mean?

Answer 25

Price where supply equals demand

Question 26

What are normal goods?

Answer 26

Demand increases as income rises

Question 27

What are luxury goods?

Answer 27

Demand and increases significantly with income increases

Question 28

What are inferior goods?

Answer 28

Demand decreases as income rises

Question 29

What is positive YED?

Answer 29

Demand rises with increasing income

Question 30

What is negative YED?

Answer 30

Demand falls with increasing income

Question 31

What is inelastic YED?

Answer 31

Demand changes less than income changes

Question 32

What is elastic YED?

Answer 32

Demand changes more than income changes

Question 33

What is sales forecasting?

Answer 33

Analysing trends to predict future sales

Question 34

What is financial planning?

Answer 34

Planning based on future income and sales

Question 35

What are substitutes?

Answer 35

Alternative products affecting demand elasticity

Question 36

What are cost cutting measures?

Answer 36

Strategies to reduce expenses during declining sales

Question 37

What is a price increase strategy?

Answer 37

Used when demand is price inelastic

Question 38

What is the market clearing price?

Answer 38

Price at which all goods are sold

Question 39

What is consumer income change?

Answer 39

Impact on quantity demanded for various goods

Question 40

What is loyalty impact?

Answer 40

Brand loyalty affects demand elasticity