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Microeconomics - Coggle Diagram
Microeconomics
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.
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Law of supply: If price increases, quantity of supply will be bigger.
Higher price means that there is more profit for the producer, so firms want to produce more of the product.
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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.
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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.
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Competitive market
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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.
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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
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The price mechanism: is the way in which changes in price affect the quantity of demand and the quantity of supply.
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