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Change in supply
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One of the six factors that causes the supply curve to SHIFT
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As prices increase
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Quantity demanded decreases
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law of diminishing marginal utility
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the principle that consumers experience diminishing additional satisfaction as they consume more of a good or service during a given period of time
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Income effect
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the change in consumption that results when a price increase/ decrease causes real income to decline or increase
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Substitute goods
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Products or services that can be used in place of each other. When the price of one product rises, the demand for the other product rises (Coca-Cola and Pepsi)
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Complimentary goods
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Goods that go together, if price ↑ the demand for both that good and complimentary good ↓ (ex: peanut butter and jelly).
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Change in demand
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One of the six factors that causes the demand curve to SHIFT
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Total revenue
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Price x Quantity sold
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Competitive pricing
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Occurs when producers sell products at lower prices to lure customers away from rival producers, while still making a profit
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Rationing
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A system of allocating scarce goods and services using criteria other than price
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Black market
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a market in which goods are sold illegally
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perfect competition
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the degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product
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Monopoly
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the sole possession or control (by one business) of the supply or trade in a commodity or service.
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Cartel
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a formal organization of producers that agree to coordinate prices and production
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Economies of scale
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factors that cause a producer's average cost per unit to fall as output rises
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patent
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Exclusive rights over an invention or an idea for a certain number of years
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Oligopoly
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A market structure in which a few large firms dominate a market
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Trust
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A group of corporations run by a single board of directors
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Predatory pricing
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selling a product below cost (low price) to drive competitors out of the market
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