Resource Allocation in Competitive Markets Flashcards
1
Q
Demand
A
The demand for a good is the quantity of the good that consumers are able and willing to buy at each price over a period of time, ceteris paribus.
2
Q
Supply
A
The supply of a good is the quantity of the good that firms are able and willing to sell at each price over a period of time, ceteris paribus.
3
Q
Price Elasticity of Demand
A
The price elasticity of demand (PED) for a good is a measure of the degree of responsiveness of the quantity demanded to a change in the price, ceteris paribus.
4
Q
Price Elasticity of Supply
A
The price elasticity of supply (PES) of a good is a measure of the degree of responsiveness of the quantity supplied to a change in the price, ceteris paribus.
