RCPSvirtualMicroeconomics
Terms
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- Surplus
- situation in which quantity supplied is greater that quantity demanded; also known as excess supply
- Monopolistic Competition
- a market structure in which many companies sell products that are similar but not identical
- Substitutes
- goods used in place of each other
- Economies of Scale
- factors that cause a producer's average cost per unit to fall as output rises
- Trust
- like a cartel, an illegal grouping of companies that discourages competition
- Price Fixing
- an agreement among firms to charge one price for the same good
- Inelastic
- describes demand that is not very sensitive to a change in price
- Diminishing Marginal Returns
- a level of production in which the marginal product of labor decreases as the number of workers increases
- Subsidy
- a government payment that supports a business or market
- Demand Curve
- a graphic representation of a demand schedule
- Substitution Effect
- when consumers react to an increase in a good's price by consuming less of that good and more of other goods
- Equilibrium
- the point at which quantity is demanded and quantity supplied are equal
- Demand
- the desire to own something and the ability to pay for it
- Merger
- combination of two or more companies in to a single firm
- Price Ceiling
- a maximum that can be legally charged for a good or service
- Price Discrimination
- division of customers into groups based on how much they will pay for a good
- Perfect Competition
- a market structure in which a large number of firms all produce the same product
- Government Monopoly
- a monopoly createed by the government
- Supply Curve
- a graph of a quantity supplied of a good at different prices
- Quantity Supplied
- the amount a supplier is willing and able to supplu at a certain price
- Law of Supply
- tendancy of suppliers to offer more of a good at a higher price
- Nonprice Competition
- a way to attract customers through style, service, or location, but not a lower price
- Market Supply Schedule
- a chart that lists how much of a good all suplliers will offer at different prices
- Shortage
- situation in which the quantity demanded is greater than the quansity supplied, also known as excess demand
- Elasticity of Supply
- a measure of the way quantity supplied reacts to a change in price
- Increasing Marginal Returns
- a level of production in which the marginal product of labor increases as the number of workers increases
- Price Floor
- a minimum price for a good or service
- Supply
- the amount of goods available
- Elasticity of Demand
- a measure of how consumers react to a change in price
- Oligopoly
- a market structure in which a few large firms dominate a market
- Deregulation
- the removal of some government controls over a market
- Market Demand Schedule
- a table that lists the quantity of a good all consumers in a market will buy at every different price
- Law of Demand
- economic law that states that consumers buy more of a good when its price decreases and less when its price increases
- Natural Monopoly
- a market that runs most efficiently when one large firm supplies all the output
- Complements
- two goods that are bought and used together
- Spillover Costs
- costs of production that affect people who have no control over how much of a good is produced
- Cartel
- a formal organization of producers that agree to coordinate prices and production
- Elastic
- describes demand that is very sensitive to a change in price