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| Comparative static analysis |
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Definition
compares an initial equilibrium with a new equilibrium, where the
difference is due to a change in one of the other things that lie behind the demand curve or the
supply curve. |
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when a price reduction (rise) for a related product increases (reduces) the
demand for a primary product, it is a complement for the primary product. |
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is a graphical expression of the relationship between price and quantity demanded,
with other influences remaining unchanged. |
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| exists when the quantity demanded exceeds quantity supplied at the going price |
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| exists when the quantity supplied exceeds the quantity demanded at the going price. |
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| is one whose demand falls in response to higher incomes. |
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| the horizontal sum of individual demands. |
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| is one whose demand increases in response to higher incomes |
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Definition
| are government rules or laws that inhibit the formation of market-determined prices |
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| defines the amount purchased at a particular price. |
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| refers to the amount supplied at a particular price. |
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| are restrictions on output or sales |
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| determines outcomes at prices other than the equilibrium. |
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is the quantity of a good or service that sellers are willing to sell at each possible price,
with all other influences on supply remaining unchanged. |
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| Price is the price at which quantity demand equals the quantity supplied; it equilibrates the market. |
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Definition
| when a price reduction (rise) for a related product reduces (increase) the demand for a primary product, it is a substitute for the primary product. |
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