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Overall Supply
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All quantities provided by all producers at all possible prices.
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Circular Flow Diagram
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A visual way of representing the movement of money, resources and products in the economy.
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Price Ceiling
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A government mandated price for something that the market may not go above (rent control).
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Quantity Supplied
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The amount of a product that a seller is willing and able to bring to market at a given price.
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Substitute Goods
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Products that are purchased as alternatives to one another.
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Product Market
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Exchange between households and producers for final goods and services.
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Pure / Perfect Competition
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There are many sellers and their products sold are nearly identical; prices remain the same for all sellers.
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Oligopoly
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There are a few sellers in the market who control 75% of the market or more, there is little competition.
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Product Differentiation
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The practice of a seller distinguishing their product in order to capture more sells in the market.
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Equilibrium / Market Clearing Price
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The price at which the quantity demanded equals the quantity supplied.
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Market Supply Curve
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The representation on a graph of all quantities provided by all producers at all possible prices.
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Law of Supply
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As prices go up, the quantity increases of what households and firms are willing and able to sell (direct relationship).
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Complementary Goods
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Products that are purchased together.
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Quantity Demanded
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The amount of a product that a buyer is willing and able to purchase at a given price.
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Price Floor
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A government mandated price for something that a market man not go below (minimum wage).
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Monopolistic Competition
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There are many sellers and their products sold are similar but not identical; competition is high, but prices vary by brand.
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Monopoly
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There is only one seller in the market, there is no competition.
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Market Structures
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The ways that firms interact in a market, as determined by the number of firms and how they compete.
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Resource / Factor Market
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The exchange between households and producers for land, labor, capital, and entrepreneurship.
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Overall Demand
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All quantities wanted by buyers at all possible prices.
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Market Demand Curve
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The representation on a graph of all quantities wanted by buyers at all possible prices.
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Law of Demand
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As prices go up, the quantity decreases of what households and firms are willing and able to buy (inverse relationship)
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Sole Proprietorship
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firm type with one owner, who keeps all profits but bears all risks and responsibilities.
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Liability
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A feature of all firms, it is the financial obligation that a firm has to anyone with whom they have contracted to provide something (like a loan repayment).
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Corporation
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firm type with multiple owners (stockholders) who have no liability, but limited control of the firm.
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Partnership
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firm type with two or more owners, who share all profits and have shared risks and responsibilities.
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