Microeconomics Market Equilibrium and The Price System Flashcards
Market equilibrium
a situation that occurs in a market when the price is such that the quantity that consumers wish to buy is exactly balanced by the quantity that firms wish to supply
Derived demand
demand for a factor of production or good which derives not from the factor or the good itself, but from goods or services that it produces
Unemployment
results when people seeking work at the going wage cannot find a job
Comparative static analysis
examines the effect on equilibrium of a change in the external conditions affecting a market
Elasticity
a measure of the sensitivity of one variable to changes in another variable
Price elasticity of demand (PED)
a measure of the sensitivity of quantity demanded to a change in the price of a good or service. It is measured as %changequantitydemanded/%changeprice