2 FUNDAMENTAL MARKET PRINCIPLES
Last Modified: 2011-10-17
- goods that go together with other goods
- examples: hot dogs and hot dog buns, shampoo and hair brushes
- the idea of potential lost value
- associated with 'supply'
- the total number of consumers willing and able to buy a good at various prices during a specific point in time
- a measurement of value
- the phenomenon in which added satisfaction [in using a good or service] decreases with each additional use of it
- OR the reality that for each additional unit produced, additional value decreases little by little
- the balance between demand and supply
- the point at which quantity demanded and quantity supplied are the same
- any production-related expense experienced by a producer
- examples: payroll, utility bills, physical capital
- what sets the equilibrium price and quantity of a market
- the natural balance caused by producers and consumers pursuing their self-interest
- a term coined by 18th-century British economist Adam Smith
- goods that are purchased when the economy is strong
- goods that consumers buy less of when economic times grow uncertain
- a permanent shortage enforced by the government
- example: rent control
- a permanent surplus enforced by the government
- example: minimum wage
goods that are essentially the same as other goods
examples: Coca-Cola, Pepsi, RC, Sam's Choice cola
- the idea of something having worth
- associated with 'demand'
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