Microeconomics
Competitive market
Supply it is defined as the quantity of a good or service that producers are willing and able to offer at various prices during a specify time period.
Demand
Market equilibrium (same amount of supply and demand)
Surplus (excess of supply)
Shortage (excess of demand)
Marginal cost: the cost of producing one more unit of a good
What consumers are willing and able to purchase when they only consider the price of the goods.
Effective demand (consumer is able to purchase supply)
Law of supply: If price increases, quantity of supply will be bigger.
Consumer Surplus: It is the difference between the highest price consumers are willing and able to pay for a good and the and the actual price they pay.
Producer surplus: It is the difference between the lowest price the producer is willing to give for and the actual amount received by him when he makes the trade
The price mechanism: is the way in which changes in price affect the quantity of demand and the quantity of supply.
Productivity efficiency: Producing the most amount of product with the fewest amount of resources
Higher price means that there is more profit for the producer, so firms want to produce more of the product.
We asume there is no change on other factors
Marginal return refers to the additional output gained from adding more units of input to a production process.
Possibility in production: It is when the number of firms that offers the same good increases, then the amount of supply of that product also increases. This makes the supply curve to move to the right.
Relationship between goods
Joint supply : It is when 2 or more good are delivered from the same productor. So it is not posible producing more of one without producing more of the other.
Competitive supply:
Concept of supply: This is the maximum quantity that a producer is willing to supply for a certain amount of time.
Determinants of supply:
When the price of the product falls the supply decreases and when the price increases the supply increases.
Factors oder than the price of the product