Define these terms and discuss how these terms individually apply to both supply and demand and to a business owner who is contemplating expanding internationally.

Global managerial economics-phase 1 – macro and microeconomic

Supply: Supply is the quantity of a product or service that producers are willing and able to provide at a given price. For businesses expanding internationally, supply can be affected by global factors such as trade agreements, tariffs, currency exchange rates, and political instability.

Demand: Demand is the desire and ability of consumers to purchase goods or services at a given price. For business owners considering international expansion, demand may be influenced by local economic conditions such as incomes levels and purchasing power parity in different countries.

Price Elasticity: Price elasticity refers to how responsive demand for a good or service is when prices change. It can help business owners understand if their product will remain desirable even with small changes in price due to international market forces such as currency fluctuations or taxes.

Income Elasticity: Income elasticity measures how much demand for a good or service changes when income levels change in different countries. This helps businesses understand if their product will still have appeal if incomes vary significantly between countries they plan on entering into the international market.