chaper 5
supply schedule
A table showing how much a producer will supply at all possible prices
describe what economists mean by supply
Econimist mean supply is what is offered for sale
supply curve
a graph that shows the different amounts of a product supplied over a range of possible prices
market supply curve
a graph that shows the various amounts offered by all firms over a range of possible prices
supply elasticity
a measure of how the quantity supplied responds to a change in price
production function
agraoh showing how a change in the amount of a single variable input changes total output
quantity supplied
amount offered for sale at a given price
overhead
broad category of fixed costs that includes rent, taxes, and executive salaries
why do business analyze there costs?
business analyze there cost to produce efficently, also to show them that they are making money or where they need to cut back. it allows them see what they will make and lose.
change in quantity supplied
change in amount offered for sale when the price changes
describe the factors that can cause a change in supply
coast of resources, productivity, technology, taxes and subsidies, expectations, government regulations and number of sellers are all factors that can cause a change in supply
finding the profit-maximizing quantity of output by
comparing marginal cost to there marginal revenue
fixed cost
costs that remain the same regardless of level of production or services offered
marginal analysis
decision making that compares the extra costs of doing something to the extra benefits gained
what are the tree types of elasticity ,
elastic: more than proportional unit elastic: proportional inelastic: less then proportional.
e-commerce
electronic business conducted over the internet
marginal cost
extra cost of producing one additional unit of production
marginal product
extra output due to the addition of one more unit of input
marginal revenue
extra revenue from the sale of one additional unit of output
profit- maximizing quantity of output
level of production where marginal costs is equal to marginal revenue
what are the two revenue
marginal revenue : extra revenue from one additional units of out put total revenue: revenue based on number of units multiplied by average price per unit
stages of production
phase of production that consist pf increasing , decreasing, and negative marginal returns
variable costs
production costs that change when production levels change
break-even point
production level where total cost equals total revenue
long run
production period long enough to change the amounts of all inputs
short run
production period so short that only the variable inputs usually labor can be changed
what happens is marginal cost and marginal revenue are equal
profit maximizing quantity of output
when the price goes down
quantity supplied goes down
when the price goes up
quantity supplied goes up
change in supply
situation where different amounts are offered for sale at all possible prices in the market: shift of the supply curve
describe the tree stages of production
stage 1 increasing marginal returns. stage 2 decreasing marginal returns. this stage is where the out put increase at the diminishing rate as more variables input are added. and stage 3 negative marginal returns this stage is where the marginal products of addition workers are negative.
diminishing returns
stage where output increases at a decreasing rate as more units if variable input are add
what the difference between individual a supply curve and market supply curve
supply curve is a graph that shows the different amounts of a product supplied over a range of possible prices. Market supply curve is a graph that show the various amounts offered by all firms over a range of possible prices. Market supply curve is different cause it shows all the firms . and supply curve is only of one firm.
supply
the amount of a product that would be offered for sale at all possible prices
the production function helps us find
the optimal number variable units to be used in production.
law of supply
the principle that suppliers will normally offer more for sale at high prices and less at lower prices
total cost
the sum of fixed costs and variable costs
how do bisness determin there profit maximization output.
they check there maimization output by comparing marginal cost to there marginal revenue.
total revenue
total amount earned by a firm from the sale of its products
describe the relationship between marginal cost and total cost
total cost is the sum of fixed cost and variable costs and marginal cost is extra cost of a pricing one additional unit of a production. marginal cost allows you to see what losses were subtracted from the total cost.
total product
total out put or total production by a firm
what is the difference between total production and marginal production?
total production is the total out put produced by a firm and marginal product is the extra output or change in total product caused by adding one more unit variable input.
explain the difference between fixed and variable cost
fixed costs is costs that remain the same regardless of level of production or services offered, and variable costs production costs that change when production levels change. the difference i fixed cost stays the same and variable costs can change.
what are the three costs
fixed: always stays the same and always has to be paid Variable cost: varies depending on level of production marginal costs: extra cost pre additional unit of out put
subsidy
government payment to encourage or protect a certain economic activity
