Ch. 3 Flashcards
change in the quantity supplied
The change in quantity associated with movement along a fixed supply curve
complements in production
Goods that are made together. Your supply of a good will increase if the price of a complement in production rises.
decrease in supply
A shift of the supply curve to the left
diminishing marginal product
The marginal product of an input declines as you use more of that input
fixed costs
Those costs that don’t vary when your change the quantity of output you produce
increase in supply
A shift in the supply curve to the right
individual supply curve
A graph plotting the quantity of an item that a business plans to sell at each price
law of supply
the tendency for the quantity supplied to be higher when the price is higher
marginal product
The increase in output that arises from an additional unit of input
market supply curve
A graph plotting the total quantity of an item supplied by the entire market, at each price
movement along the supply curve
A price change causes movement from one point on a fixed supply curve to another point on the same curve
perfect competition
Markets in which 1. all firms in an industry sell an identical good; and 2. there are many buyers and sellers, each of whom is small relative to the size of the market
price-taker
Someone who decides to charge the prevailing price and whose actions do not affect the prevailing price
shift in the supply curve
a movement of the supply curve itself
substitutes in production
Alternative uses of your resources. Your supply of a good will decrease if the price of a substitute in production rises
