demand curve - graph that relates the quantity sold and price, showing the maximum number of units
that will be sold at a given price
consumer tastes - depends on demographics, culture, and technology
-can change quickly
price and availability of similar products - price falls, more people buys
, -price of substitute falls or availability increases, demand for normal food falls
consumer income - consumers income increase, demand for a product will also increase
demand factors - factors that determine consumers willingness and ability to pay for products and
services
price elasticity of demand - = percentage change in quantity demanded/ percentage change in price
elastic demand - 1% decrease in price produces more than 1% increase in quantity demanded, thereby
increasing total revenue
inelastic demand - 1% decrease in price produces less than a 1% increase in quantity demanded, thereby
decreasing total revenue.
total revenue - total money recieved from the sale of a product
=P (price) x Q (quantity sold)
4 cost concepts - total cost, fixed cost, variable cost, and unit variable cost
break-even analysis - analyzes the relationship between total revenue and total cost to determine
profitability at various levels of output
break even point (BEP) - quantity at which total revenue and total cost are equal
= Fixed cost/ unit price -unit variable cost
break even chart - depicts graphic presentation of the break-even analysis
demand-oriented approach - weigh factors underlying expected customer tastes and preferences more
heavily than such factors such as cost, profit, and competition when selecting a price level
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller VasilyKichigin. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £10.97. You're not tied to anything after your purchase.
