Business Operational Management and Price Elasticity of Demand

Flashcards covering key concepts from Business Operational Management, including sampling methods and Price Elasticity of Demand, based on provided lecture notes.

What is Quota Sampling?

Quota sampling is a method where the population is first segmented into subgroups, and then a judgment is made in selecting respondents who are representative of that subgroup.

How is Stratified Sampling conducted?

In stratified sampling, the population is first segmented into subgroups, and then respondents are randomly selected from within each subgroup.

What is the primary difference between Quota Sampling and Stratified Sampling?

Quota Sampling uses judgment to select representative respondents from subgroups, while Stratified Sampling uses random selection from subgroups.

What does Price Elasticity of Demand (PED) measure?

PED measures the sensitivity of demand in response to a change in price, or how much demand will change if the price is changed.

What is the formula for Price Elasticity of Demand (PED)?

PED = % change in quantity demanded / % change in price

What does it mean if a product has a price inelasticity of demand that is less than 1 but greater than 0?

It means the percentage change in quantity demanded is less than the percentage change in price, indicating price inelasticity.

What does it mean if a product has a price elasticity of demand greater than 1?

It means that when the price changes, there is a larger percentage change in quantity demanded, indicating price elasticity.

How does understanding Price Elasticity of Demand help a business?

It helps the business to price products by informing their pricing strategies.

Name some examples of price inelastic products.

Good (necessities), textbooks, petrol, diesel, drugs + alcohol, cigarettes.

Name some examples of price elastic products.

Designer items, luxury goods, houses, shoes, phones, luxury chocolate, branded items.