Quiz #3 Vocab Flashcards
Consumers are proportionately sensitive to price changes; %
Unit elastic demand
Consumera are relatively less sensitive to price changes; %
Inelastic demand
Consumers are relatively sensitive to price changes; %
Elastic demand
Small increase in price will cause quantity demanded to fall to zero; flat demand curve; coefficient = infinity
Perfectly elastic
Consumers will buy the same quantity of a good regardless of price; vertical demand curve; coefficient =0
Perfectly in elastic
Price x quantity sold
Total revenue
Revenue per unit of output; total revenue/quantity
Average revenue
Revenue earned on one additional unit of output
Marginal revenue
Costs that do not change with output levels; will be lost in the event of a shutdown
Fixed costs
Costs that will change with output; firms can operate as long a P_>(greater than or equal to) AVC
Variable costs
Fixed cost+variable costs
Total cost
The cost of making one more unit of output;
Marginal cost
Revenue minus cost
Profit
Profit gained from selling one more unit of output
Marginal profit
Profit earned on each unit of output
Average profit (profit per unit)
Market for a good (usually a financial security) when it’s initially sold
Primary market
Market for a good (usually a financial security) when it is brought and sold from other owners/investors and not from the original issuer
Secondary market
