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Market
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This is the arrangement where buyers and sellers learn information from one another and voluntarily exchange goods, services and money.
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Circular Flow Diagram
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This is the two sector economic model showing how firms, or businesses, and consumers, or households, interact.
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Factor Market
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that part of the economy where labor and resources are sold
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Product Market
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This is where goods and services are sold in the circular flow model of income in economic theory.
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Demand
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This is the amount of a good or service that consumers are willing and able to buy at a given price at a given time.
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Law Of Demand
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This is the rule stating that more of a product will be consumed at a lower price and less will be consumed at a higher price.
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Demand Curve
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This is the graph that shows the relationship between the price of a good and the amount of it that buyers are willing to purchase at that price.
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Supply
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This is the amount of a good or service that producers are willing to produce at a given time.
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Law Of Supply
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the rule which states that more of a product will be produced when the price is high and less will be produced when the price is low
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Supply Curve
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This is a graphic representation of the quantity producers are willing to produce at different prices.
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Elastic
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This is when the demand of a product is strongly responsive to price changes.
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Inelastic
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This is when the demand of a product is weakly responsive to price changes.
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Equilibrium Price
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Determined by the intersection of the supply and demand curves on a graph
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Shortage
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the situation which exists when the quantity demanded is greater than the quantity supplied
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Price Ceiling
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This is the term for the maximum legal price that can be charged for a product.
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Surplus
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the situation that exists when the quantity supplied of an item is greater than the quantity demanded.
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Price Floor
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This is the lowest legal price that can be charged for a product.
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Market Structure
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This describes the state of a market with respect to competition.
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Perfect (Pure) Competition
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This is a market form where no producer or consumer has the market power to influence prices. It is theoretical.
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Monopolistic Competition
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This is a market structure where there are many producers selling differentiated products (substitutes but are not exactly alike), no one firm has total control over price, there are few barriers to entry, but consumers feel there are non-price differences between the goods sold.
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Oligopoly
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This is a market where a few large suppliers control the supply of a product.
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Monopoly
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This is when one company controls the market for a certain product, there is no competition.
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Sole Proprietorship
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This is an unincorporated business owned and run by one person.
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Partnership
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an unincorporated business owned and run by two or more people
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Corporation
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A type of business organization where the business is recognized as a legal entity with the right to sell stock.
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