Studied by 0 people
Looks like no one added any tags here yet for you.
Price Elasticity of Supply
Measures the responsiveness of quantity supplied to changes in price
Perfectly Inelastic Supply
The quantity supplied is fixed and does not change in response to price changes
Elastic Supply
The quantity supplied changes by a larger percentage than the price change
Producer Surplus
The difference between the price received by a seller and their opportunity cost
Consumer Surplus
The difference between what a buyer is willing to pay and what they actually pay
Total Surplus
The sum of consumer surplus and producer surplus
Efficient Allocation of Resources
Occurs when total surplus is maximized and no potential gains from trade remain
Market Equilibrium
The point where the quantity buyers are willing to buy equals the quantity sellers are willing to sell
Tendering Process
A competitive process where producers compete to provide goods or services to buyers
Opportunity Cost
The value of the next best alternative given up when choosing to produce a good or service
