The amount of a good or service that consumers are willing and able to buy at a given price.
Law of Demand
States demand for a product avries inversely with its price.
Table showing the amount of a good or service that people will buy at various prices.
Graph that shows how demnad for a good or service increases or decreases at various prices.
Occurs when a change in price affects demand for a product.
One that competes with and can easily be used in place of another
One good that is generally used with another good.
Can determine if demand is elastic or inelastic with a total receipts test.
Firm wants to maximize its revenue. (company should lower prices)
Firm can maximize its revenue by raising prices.
The amount of a good or service that people or businesses are willing to prvide at a given price.
Law of Supply
States that the quantity of goods and services offered for sale varies directly with price. According to the law of supply, the higher the price, the greater the quantity offered for sell, the lower the price, the less offered for sell.
Table that shows the quantity of goods that will be supplied at each price.
Graph that shows the quantity of goods that will be offered at each price level
Refers to the effect of a change of price on the amount of the good or service tat is supplied
Supply that is very responsive to price.
Is supply that not very responsive to price; both show the relationship between supply and price changes.
Costs that remain the same regardlless of the amount produced
Changes as the level of production changes
The sum of the fixed and variable costs
Additional cost of producing one more unit of output
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