EPF Micro Unit

Supply

The ability and willingness to of suppliers to make things available for sale at set prices

Altruist Law

Federal and State government laws that regulate the conduct and running of business corporations to promote fair competition for consumer benefit.

Demand

Desire, willingness and ability on the part of people to buy certain quantities of a product at different price levels

Direct Competition

Occurs when 2 or more businesses offer the same or very similar products/services, targeting the same target market and customers. This type of competition directly impacts pricing and market share among competitors.

Complementary Goods

When goods complement each other, there is an inverse relationship between the price of one and the demand for the other

Elastic Demand

Situation where the quantity demanded for a product/service changes in response to a change in its price. Small price increase causes a large drop in demand.

Elastic Supply

When the quantity of a good/service that producers are willing to supply changes a lot when prices change. A small price change leads to a large change in quantity supplied.

Equilibrium Price

The price level at which the quantity demanded is the same as the quantity supply

Incentive

Something that motivates or encourages a person to take a specific action. they can be financial moral, or legal.

Indirect Competition

Occurs when businesses sell different products or services that satisfy the same customer wants or needs. The businesses compete by targeting the same customers.

Inelastic Demand

A situation where the quantity demanded of a good or service changes very little when prices vary. This is common with essential goods like food, gas, or medicine.

Inelastic Supply

A situation where the quantity of a good or service producers are willing to supply changes very little when prices vary. This occurs when its hard to increase production.

Law of Diminishing Marginal Utility

States that as a person consumes more of a good/service, the satisfaction gained decreases with each additional unit.

Living Wage

The minimum income a person needs to meet their basic needs, without requiring government assistance

Minimum Wage

The lowest hourly pay that employers are obligated to pay an employee. It was placed by the government to prevent unpaid workers.

Monopoly

A market structure where a single company or organization is the only supplier of a particular good/service; they have significant control over price and supply

Oligopoly

Market structure where a small number of large firms dominate the industry. They offer a similar type of products and are influenced by each other’s pricing and business decisions.

Perfect Competition

Market structure where many small firms selling identical products can influence the market price.

Shortage

Occurs when quantity supplied is less than amount demanded; this occurs at any price below the equilibrium and sellers will raise prices to decrease demand.

Price Floor

The minimum price that a good/service can be charged for.

Price Ceiling

The maximum price that can be charged for a good/service

Subsidy

Financial assistance or support given to people by the government to lower cost of producing goods or services

Supplementary Goods

Products that are often used together because they enhance the use or value of the other. They are often produced together too.

Surplus

Quantity supplied is more than the amount demanded; it occurs at any price above equilibrium and sellers will drop price to raise demand.

Monopolistic Competition

A market structure characterized by numerous firms that offer similar but differentiated products. These products are not perfect substitutes, meaning they have unique features or branding that allows firms to exert some control over pricing.