economics

price: price of good itself

non-price: WETPIGS

quantity of good that consumers are willing and able to buy at each possible price in a given period of time, ceteris paribus

quantity of good that consumers are willing and able to buy at a given price in a given period of time, c.p

definition: pair of good that are considered by consumers to be alternatives of each other as the level of utility derived from consuming either good is relatively similar

in competitive demand (e.g. coffee and tea as choice of beverage)

evaluate: function, price and availability to choose which good to consume

effect: when qty DD increases for coffee (point on the same curve), entire demand curve shifts to the left for tea

definition: pair of good consumed together to satisfy the same want

in joint demand (e.g. car and petrol)

there are strong and weak complements

effect: when qty DD increases for cars (point on same curve), entire demand curve for petrol shifts to the right for petrol

definition: demand for one good occurs as a result of the demand for another

goods in derived demand are bought by different economic agents (as factors inputs and final products)

e.g. steel (factors of production) and cars (final products by consumers)

for inferior good, with increasing income, consumers will consume less of such inferior goods but more of normal goods

for perishable goods, the prices will have minimal effect as the goods cannot be stored for long periods of time

quantity of good or service that producers are willing and able to sell at every possible price in a given period of time, cp

consumers POV: additional benefit/cost of consuming an additional unit of good or service

producers POV: additional benefit/cost of supplying an additional unit of good or service

price: price of good itself

non-price:

Weather
Expectation of future prices
Technology — affects MCOP
Price of related goods
Inputs of production (price) — affects MCOP
Government policies
Sellers in the market

definition: production of more of one products leads to the production of more of the other

e.g. cow hide and beef steak → simultaneously produced

effect: increase in qty SS of cow hide, shift of supply curve to the right for beef steak

definition: increased production of one means diverting resources away from producing the other

e.g. corn and ethanol

position of balance from which there is no inherent tendency to deviate in the absence of an exogenous change

rationing: for whom to produce?

signalling: reflected by rise/fall in prices to show shortages/surpluses

incentive: what and how much to produce?

measure of the degree of responsiveness of the quantity demanded for a good to a change in price of the good itself, cp

less than proportionate change in quantity demanded in the opposite direction, cp

IPEDI < 1

more than proportionate change in quantity demanded in the opposite direction, cp

IPEDI > 1

Availability and closeness of substitutes S

Addiction (more price inelastic) A

Proportion and income spent on the good I

Degree of necessity (more price inelastic) N

Time period T

measure of the degree of responsiveness of quantity supplied to a given change in price of a good, cp

more than proportionate change in quantity supplied in the same direction, cp

less than proportionate change in quantity supplied in the same direction, cp

Unitary price elastic demand/supply — IPEDI / PES= 1 (proportionate change)

Perfectly price inelastic demand/supply — IPEDI / PES= 0 (no change)

Perfectly price elastic demand/supply — IPEDI / PES= ∞ ( infinitely large change)

Availability of stock S

Existence of spare capacity SC

Mobility of factors of production [geographical and occupational mobility] FOP

Time period T

Accuracy and reliability of data

Ceteris paribus condition

Revenue vs profit

levy imposed by government upon the sales of good and services and are paid to the tax authorities, not by the consumers, but indirectly by the producers

purpose: decrease consumption/production or generate government revenue

provision of financial assistance by the government to encourage the production or consumption of a good or service

purpose: increase consumption/production or making goods more affordable