• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Three main economic theories.

Extracts from this document...


Economic Theory In this Coursework there are three main economic theories which I am going to use and they are: Demand Demand is the quantity of goods and services that will be bought at any given price over a period of time. The Law of Demand states that the lower the price the higher the quantity demanded, and the higher the price the lower the quantity demanded. Demand is related to Price Here is an example of how price and demand are related and how it is shown on a diagram Demand Schedule Price (p) Quantity Demanded 80 1 70 2 60 3 50 4 Diagram The demand curve slopes downwards from left to the right because of the law of demand. A movement along the demand curve is caused by a change in the price itself. ...read more.


If on the other hand the price of good A falls then this will decrease the demand for the other. Therefore, if the price of good A falls then there will be a decrease in the demand of good B. This will shift the demand curve to the left from D D1. Equilibrium Equilibrium refers to a situation where there is no tendency towards change. At a point of equilibrium, producers are selling all of their output so there is no need for them to reduce their selling price. Similarly, all those people who are willing to buy the product can be accommodated by the supply available. 1. The signal sent back to the producer is that the price is too low. 2. The signal sent back to the producer is that the price is too high. 3. ...read more.


Price Elasticity of Demand It is abbreviated by: PED PED measures the responsiveness of changes in the quantity demanded as a result of a change in price. Formula to measure PED: % Change in quantity demanded % Change in price EXAMPLE Change in price % Change in quantity demanded % Elasticity % 10 20 2 50 25 .5 * Demand is elastic There is a relatively large response in the quantity demanded to a change in price. * Demand is inelastic There is a relatively small response in the quantity demanded to a change in price. * Demand is unitary elastic There is an equal percentage response in quantity demanded to a change in price. ...Later on it would be interesting to apply these economic theories to my coursework on Coca Cola and it will be interesting to see what I find out, for example seeing whether Coca Cola is elastic or inelastic e.t.c. My definitions and theories came from specific worksheets and a text book which I got out of my local library. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Marketing & Research section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Marketing & Research essays

  1. Mcdonalds. For this unit I will need to produce a portfolio of work investigating ...

    They have used many promotional methods to make their products well known then those of their competitor businesses. This shows that by having competition McDonalds sales have also increased. Financial Planning Planning their financial resources has helped McDonalds to maintain their cash flow.

  2. Applied Business Unit 2 Coursework

    forms because Warwick university wont have to sort through a variety of forms with a variety of different handwriting. It is extremely important to ask all of the personal information within the application form because if the applicant gets the job then Warwick University will need to know who to

  1. For this assignment I have been asked to produce a new marketing strategy for ...

    that some of the people that are picked do not use your product or service. Quota sampling- this is where the people picked to do a survey are chosen because they meet certain characteristics, such as age, gender, ethnicity, where they etc.


    Ministry of Steel and Ministry of Rural Development for promotion of use of steel in the rural markets. Various measures were suggested to increase the use of steel in the rural areas. It was decided that the cooperation of Ministry of Surface Transport, Ministry of Tribal Affairs, Ministry of Finance,

  1. I am going to be writing about the concepts of marketing distinctiveness of the ...

    to a business as they are the things that bring money into a business. Apple provides a variation of iPods which can be seen as their goods and the service it provides is ITunes where you they can download the music for their iPod.

  2. Outline the main reasons why most companies pursue profit maximisation as their main business ...

    P1 and Q1 occur when supply and demand are in equilibrium The change in price/demand when demand/price is changed, respectively, is known as elasticity and is defined by Begg, D. and Ward (2004, p36) as "a measure of responsiveness of demand to a change in price...

  1. Applied Business Studies

    As my business is a theatre shop, not everyone will be going to the store, as they will not want to buy loads of props for no reason. The main reason why people will go to my shop is for the costumes and props, if they are going to a party for example.

  2. This is a report on the international dimension of Costa Coffee and Coffee Aroma.

    It was acquired by Whitbread in 1995, since when it has grown to over 2,000 stores across 25 countries. Bruno and Sergio Costa founded a coffee roaster in Lambeth, London in 1971, supplying local caterers and coffee shops with their slow-roasted blend mocha Italia.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work