Term
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Definition
| As income goes up, budget spent on food goes down |
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Term
Total Revenue (TR)
Average Revenue (AR)
Marginal Revenue (MR)
Demand Elasticities
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Definition
(TR) - P*Q
(AR) - P = TR/ Q
(MR) - AR @ twice the slope
Demand Elacticities = €p is (price).. €inc is (INC)
a 1% change in price results in a ____ % change in QD in the ______ dirrection
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Term
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Definition
- market boundary between 2 or more suppliers are determined by area of:
- procuct cost + transportation costs.. they MUST BE EQUAL
- competition goes up, market power goes down |
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Term
Why Estimate a Demand curve? |
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Definition
- determine elasticities
- predict future demand prices
- better understand different componets
- to aid in marketing decisions |
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Term
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Definition
- correlation R is bound between -1 and +1 and tells how negative or positive they are:
- if # is closer to +1, this is STRONGER
- if # is closer to -1, this is WEAKER
.90 is stronger than .89 and < |
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Term
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Definition
- marketing can be thought of as means by which one firm differentiates its product to service from that of its competeator
- by differentiating the firm has some markey power. they are able to have more control over prices and what they charge.
- a firm seeking this, wants and own price elasticity smaller than infinity and a x-price close to 0 |
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Term
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Definition
| - if the r2 is .714, this means that 71% of cariation in Q could be explained in the regression output |
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Term
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Definition
based on t-stat:
< 2 = significantly different than 0
> 2 = not signigicantly different than 0 |
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