1. YED
1.1. % change in quantity demanded / % change in income
1.1.1. Income Elasticity of demand
1.1.2. Interpretation
1.1.2.1. The income elasticity of demand reveals how responsive the change in quantitiy demanded is to change in income.
1.1.3. Implications for a business
1.1.3.1. Allows them to plan production and products and understand how market demand will change during economic fluctuations
2. PED
2.1. % change in quantity demanded / % change in price
2.1.1. Price Elasticity of demand
2.1.2. Interpretaion
2.1.2.1. The price elasticity of demand helps us to calculate how responsive the change in quantity demanded will be to change in price
3. Demand - refers to the number of goods and services customers are willing and able to buy at a given price
3.1. Draw a Demand Curve
3.1.1. Factors leading to change in demand
3.1.1.1. Non Price factors
3.1.1.1.1. Price of goods; compliments & subsitutes
3.1.1.1.2. Changes in fashion & tastes
3.1.1.1.3. Seasonality
3.1.1.1.4. External shocks
3.1.1.1.5. Advertising & branding
3.1.1.1.6. Changes to income
3.1.1.1.7. Changing demographics
3.1.1.2. The non-price factors affecting demand result in a shift of the entire demand curve
4. Supply - is the number of goods and services businesses are willing to sell at a given price in a specific time period
4.1. There is a direct relationship between supply and price
4.2. Draw a Supply Curve
4.2.1. Factors leading to change in supply
4.2.1.1. Non-price factors
4.2.1.1.1. Changes in cost of production
4.2.1.1.2. New technology
4.2.1.1.3. External shocks
4.2.1.1.4. Indirect taxes
4.2.1.1.5. Government subsides
4.2.1.2. The non-price factors include changes in the costs of production, external shocks and indirect taxes.