Chapter 5: Supply Flashcards
the desire and ability to produce and sell a product
supply
when prices decrease, quantity supplied decreases; when prices increase, quantity supplied increases
law of supply
lists how much of a good or service an individual producer is willing/able to offer for sale at each price
left side: price
right side: quantity supplied
supply schedule
same as a supply schedule, but for all; not just for an individual
market supply schedule
shows the data from a supply schedule in graph form
y-axis: price
x-axis: quantity supplied
slopes upward
supply curve
shows data from a market supply schedule in graph form
market supply curve
the change in total output brought about by adding one more worker
marginal product
having a worker focus on a particular aspect of production
specialization
occur when hiring new workers causes marginal product to increase
increasing returns
occur when hiring new workers causes marginal product to decrease
diminishing returns
those that business owners incur no matter how much they produce
fixed cost
depend on the level of production output (change)
variable cost
the sum of fixed and variable costs
total cost
the extra cost of producing one more unit
marginal cost
the money made from the sale of each additional unit of output
marginal revenue (price)