Econ Unit Test 2
Terms
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- elastic demand
- a large change in price causes a large change in quantity demanded
- product differentiation
- product differences are emphasized
- change in demand
- actual shift in the demand curve
- law of supply
- suppliers offer more at higher prices and offer less at lower prices
- bear market
- when the stock market drops (around 20% and can last 9-18 months)
- non-price competition
- appeal to consumers with anything but price
- consumer surplus
- difference between willingness to pay and actual price (you get more than you paid for)
- equity
- value - what you owe
- bull market
- when the stock market rises (around 10% and can last 3-6 years)
- inelastic demand
- large change in price does not cause a large change in quantity demanded
- economies of scale
- cost advantages obtained by expanding
- caveat
- when the demand for normal goods rises, the demand for inferior goods falls
- supply
- the amount of a product that would be offered for sale at all possible prices that could prevail in the market
- cartels
- companies openly organizing a system
- price elasticity of demand
- the extent to which a change in price causes a change in quantity demanded
- collusion
- sellers secretly agree to set production levels