Usefulness of YED

Jia Jun Neo
Mind Map by Jia Jun Neo, updated more than 1 year ago
Jia Jun Neo
Created by Jia Jun Neo over 2 years ago


Mind Map on Usefulness of YED, created by Jia Jun Neo on 04/24/2018.

Resource summary

Usefulness of YED
1 Firms
1.1 Luxury Goods with YED > 1
1.1.1 MTP ↑ in DD 2) Output strategy Producers will ↑ O/P to ↑ TR 1) Pricing strategy Producers will ↑ prices to ↑ TR
1.2 Inferior Goods with YED < 0
1.2.1 MTP ↓ in DD 2) Pricing strategy ↓ prices → compensate the ↓ in dd 1) Marketing strategies Product mix & diversify production into gds with higher YED 3) Output strategy ↓ o/p to ↑ TR
1.2.2 2) Segmenting of markets Sell diff range of pdts → suit C of diff Y 1) Sell necessities in mass-market locations 2) Sell luxurious gds in high Y districts
1.3 Y ↑
1.3.1 Purchasing power ↑
1.4 1) Responding to Y Δ
2 Govt
2.1 1) Determine type of gds to produce
2.1.1 E.g housing indy Recession: ↑ in dd of inferior gds, ↓ in dd of luxurious gds ↑ SS of 3-room flats & ↓ SS of executive condos
2.2 2) Forecast revenues for budget planning
2.2.1 E.g predict the extent of ↑ in DD for COEs during EG → forecast COE px & Govt revenue
2.3 3) Industrials SSP
2.3.1 Determine LT growth propsects of Indy → guide decisions on which indy to allocate resources
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