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Equilibrium price
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The point at where producers and consumers "agree" on a price and quantity
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Incentive
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A profit
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Margin of Profit
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What a producer considers when deciding whether it is worth it to add to the business
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Law of Demand
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What happens when consumers react to an increase in a good's price by consuming less of that good and more of other goods
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Price Ceiling
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When governments set a maximum price that can be charged
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Price floors
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When governments set a minimum price that can be charged
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Black Market
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This market deals in the exchange of goods an services outside the law
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Fixed cost
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A set amount something is to be sold for
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Elasticity of demand
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If there are many substitutes for a product, it is elastic (Big Mac)
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Complement
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A good that is always used with another good, for example, printers and ink cartridges
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Shortage
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When quantity demanded exceeds quantity supplied at a certain price
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Surplus
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When quantity supplied exceeds quantity demanded at a certain price
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Microeconomics
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the study of the economic behavior and decision making of small units, such as individuals, families, and businesses
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Law of Supply
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producers offer more of a good as its price increases and less as its price falls
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Subsidy
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A government payment that supports a business or market
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Market
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any arrangement that allows buyers and sellers to exchange things
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