Competitive Market: Is a market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold. Supply and Demand Model: Is a model of how a competitive market works. Quantity Demanded: Is the actual amount of a good or service consumers are willing and able to buy at some specific price. Demand Curve: Is a graphical representation of the demand schedule.
It shows the relationship between quantity demanded and price. Law of Demand: Says that a higher price for a good or service, all other things being equal, leads people to demand a smaller quantity of that good or service. Change in Demand: Is the shift of the demand curve, which changes the quantity demanded of a good that is the result of a change in that good’s price. Movement Along the Demand Curve: Is a change in the quantity demanded of a good that is the result of a change in that good’s price. Substitutes: Two goods are substitutes if a rise in the price of one of the goods leads to a decrease in the demand for the other good. Complements: Two goods are complements if a rise in the price of one of the goods leads to a decrease in the demand for the other good. Normal Good: When a rise in income level increases the demand for a goodthe normal caseit is a normal good. Inferior Good: When a rise in income decreases the demand for a good, it is an inferior good. Supply Curve: Shows the relationship between quantity supplied and price. Law of Supply: The law of supply says that, other things being equal, the price and quantity supplied of a good are positively related.
Movement Along the Supply Curve: Is a change in the quantity supplied of a good that is the result of a change in that good’s price. Input: Is anything that is used to produce a good or service. Equilibrium: An economic situation is in equilibrium when no individual would be better off doing something different. Equilibrium Price: The price that matches the quantity supplied and the quantity demanded is the equilibrium price. Surplus: There is a surplus of a good when the quantity supplied the quantity demanded. Surpluses occur when the price is above the equilibrium level. Shortage: There is a shortage of a good when the quantity demanded exceeds the quantity supplied. Shortages occur when the price is below it equilibrium level. Shifters of Supply: Input cost, Number of producers, Expectations,
Technology, Related Goods. Shifts of Demand: Population, Income, Preference, Expectations of
Future Prices, Related Goods. Double Shift: When both demand and supply increase, the equilibrium quantity increases but the change in equilibrium quantity is ambiguous. When both the demand and supply decrease, the equilibrium quantity decreases but the change in equilibrium price is ambiguous. Price Controls: Are legal restrictions on how high or low a market price may go. Price Ceiling: A maximum price sellers are allowed to charge for a good or service. Price Floor: A minimum price buyers are required to pay for a good or service. Wasted Resources: Price ceiling typically lead to inefficiency in the form of wasted resources: people expend money, effort, and time to cope with shortages caused by the price ceiling.
Black Market: A black market is a market in which goods or services are bought and sold illegally either because it is illegal to sell them at all or because the prices charged are legally prohibited by a price ceiling. Minimum Wage: Is a legal floor on the wage rate, which is the market price of labor. Wedge: In every case in which the supply of a good is legally restricted, there is a wedge between the demand price and the supply price of a good; that is, the price paid by buyers ends up being higher than that received by sellers. Quota Rent: The economic rent received by the holder of the
Nahal Sarshar Homework #7 The play, The Price, directed by Garry Hynes and written by Arthur Miller offers a great presentation not only with its stage production, but with its acting as well. This play not only surpassed my standards, but from what I saw, surpassed many other people’s too. The play portrays a life of two estranged brothers finally coming together after sixteen years in hopes to amend what has happened in the past. Garry Hynes and the cast of the play presents a remarkable performance…
Price of Electronics As we all know the price of electronics in general tends to go down in price over time and has done so for many years. This is always true in the long term but in the short term the price for some electronics can fluctuate quite a bit according to The New York Times article by Damon Darlin titled, The Farecast for electronics. In this article the author talks about predicting prices and how prices fluctuate but always go down for consumer electronics. He also talks about a…
on September 30, 2002 because of the negative impact this event will have on the futures price for lean hogs. Research Questions: There are three key questions to consider when testing whether or not impairment has occurred. 1) Are there any specific rules in place related to an inventory consisting of developing and held for sale animals? 2) Does the change in futures prices qualify as a seasonal price fluctuation or a permanent change in the market? 3) How do we define and test for impairment…
Should firms’ price discriminate? In this essay we are going to look at the reasons why a firm should price discriminate or alternatively why they should not price discriminate. Price discrimination in basic terms is when firms charge different prices for different goods and services. There are three different levels of price discrimination. First degree price discrimination is when a firm charges each customer a different price. For this type of price discrimination to be used a monopoly has to…
The Prince Essay Chapter 16 addresses the question of whether a prince should spend money freely, or be frugal with it. Niccolo Machiavelli argues that generosity will ruin a prince, because the requirements of a reputation for generosity will soon outrun his resources, and he will be forced to take his people’s wealth to fund his extravagance. This will naturally make his people hate him, and cause him endless problems. On the other hand, if a prince is willing to be known as a cheapskate, he will…
The Price of Life Today’s latest technology and facilities have made it possible to fight for the survival of a baby born at just twenty-three weeks old, which is four months early and still young enough to be aborted. But is this a lifesaving development in our society or is it going against nature? Only nine out of one hundred babies born at twenty-three weeks with societies most state-of-the-art technology will survive and of those nine just one will survive without a disability. It is the parents…
reasons why Mr Buchanan might believe that energy companies need to give greater recognition to their consumers. Introduction The price based promotion offered by British Gas (herein BG) during winter 2009/10 brought significant results in term of profits and market share. Hereafter are analysed the reasons for BG success as well as discussed the possible price strategies for gas retail sales. This analysis is based on the following points: * Analysis of consumers behaviour vs product/offer/pricing…
match the European demands. These product changes led to the raise of production costs, which result in the higher price in Europe than in the United States. Problems of higher price in Europe than in USA Price is the direct factor that affects total cost recovery, so the higher the price, the better for company to get profit. However, if the price is different and does not value the price or does not in expected quality, it may dissatisfy customers. Customers may plan to consume in other companies…
Crystal Fields White Collar Crime: Embezzlement and Price Fixing Dr. Stokes White Collar Crime Fall 2012 November 19th 2012 This paper will discuss White Collar crime and the crime of price fixing, antitrust, and embezzlement. There are many different types of white collar crime. White Collar crime is a crime that is not too often viewed as harmful. A White Collar crime is an illegal act committed for monetary gain. The Federal Bureau of Investigation has opted to approach white-collar crime…