Economics-Supply and Demand
According to the LAW OF DEMAND, when the price of an item goes up, the quantity demanded:
FALLS
Equilibrium Price
Price at which the amount producers are willing to supply is equal to the amount consumers are willing to buy.
Substitution Effect
This is the economic rule stating that if two items satisfy the same need and the price of one rises, people will buy the other.
Substitutes
When the price of a good is too high for consumers, the look for....
Surplus
Situation in which quantity supplied is greater than the quantity demanded.
Shortage
Situation in which the quantity demanded is greater than the quantity supplied.
Diminish marginal utility refers to the fact that:
Additional satisfaction declines as additional units of an item are purchased
Demand
Amount of a good or service that consumers are willing and able to buy at various possible prices
Elasticity
Economic concept dealing with consumers responsiveness to an increase or decrease in price
Elasticity
Economic concept dealing with consumers' responsiveness to an increase or decrease in price:
Law of Diminishing Returns
Economic rule stating that as more units of a factor of PRODUCTION are added, total output continues to increase, but at a DIMINISHING RATE.
Law of Supply
Economic rule stating that as prices rise, quantity supplied rises also.
Substitution Effect
Economic rule stating that if two items satisfy the same need and the price of one rises, people will buy the other.
Law of Diminishing Marginal Utility
Economic rule stating that the additional satisfaction a consumer gets from purchasing one more unit of a product declines with each additional unit purchased.
Law of Demand
Economic rule stating that the quantity demanded and price move in opposite directions.
Change in Demand
Increased income or increased population for a town can cause this.
According to the law of supply, HIGHER prices prompt producers to:
PRODUCE MORE
If a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary:
Shortage will occur and the price will increase
Inelastic
Situation in where a change in price would not change demand or supply significantly.
Law of Diminishing Returns
Stage of production where output increases at a decreasing rate as more units of variable input are added.
Supply
The amount of a good or service that producers are able and willing to sell at various prices during a specified period of time.
Demand
The amount of a good service that consumers are able and willing to buy at various possible prices during a specific time period...
Price
The quantity demanded of a product is affected by...
Could be said about higher prices in the market place:
They encourage more competitors to enter the market.
