Tutor profile: Spencer G.
Why is "price elasticity of demand" important for determining whether or not a good has a stable market?
"Price elasticity of demand" is an important characteristic for determining how a product will react to changes in its price. If a product is determined to be "elastic" it is because it's quantity demanded changes drastically given small changes in its price. The inverse is true when a product is deemed "inelastic", which is to say that large changes in its price result in small changes in quantity demanded. An example of an "elastic" goods could be articles of clothing. Clothes are goods that are priced specifically to both reflect the quality and be affordable, cheap clothing is presumed to be low-quality, and expensive clothing is imprudent. An example of an "inelastic" good would be water. Water is a necessary good, and will be demanded regardless of its price or the availability of alternatives.
Why is a "S.W.O.T." analysis important if a company has already completed thorough internal and external analyses?
A "S.W.O.T." analysis is a simple means of assessing the potential of a company given its environmental factors. A "S.W.O.T." analysis compares and contrasts the Strengths and Weaknesses of a company with the Opportunities and Threats of its environment. Although a "S.W.O.T." analysis requires no additional information, it can provide key insights, and positively influence overall strategy.
What is the difference between a "bull" and "bear" market?
"Bull" and "bear" are antonyms. Both are associated with predictions about the future state of a market value. To be "bullish" means to believe, regardless of evidence, that market value will increase. To be "bearish" means to believe, regardless of evidence, that market value will decrease. Despite that fact that either prediction is merely an estimation, the terms are typically used with vigor, and it is important to remain rational and resolved amidst this challenging emotional manipulation by wordplay.
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