Part 3 Flashcards
Inelastic supply
When the percentage change in quantity supplied is less than the percentage change
Price
The sum of money which has to be paid for a good or service
Equilibrium price and quantity
Where the quantity supplied exactly matches the quantity demanded
Determination of price
The interaction of the market forces of demand and supply to establish the general level of prices for a good or service
Allocation of resources
How scarce resources are distributed among producers and scarce goods and services are allocated among consumers
Market forces
The factors that determine price levels
And the availability of goods and services
Competition
Where different firms are trying to sell a similar product to a consumer
Impact of competition on producers
If producers do nothing then they will make no sales however if they set there prices to low they will get less profit
Monopoly
Only one produce in selling goods and services
Oligopoly
Where a small number of firms control majority of the market
Profit
The amount of money overall after all cost have been payed
Production
Total output of a good or service
Productivity
The output per unit of input
Total cost
All the Costs of the firm added together
Average cost
The cost of producing a unit of outputv
