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Microeconomics - Coggle Diagram

- - - - Labour: the workforce available for production in an economy
        
        Capital: the man made goods available for production in an economy
        
        Enterprise: the factor of production that involves taking a risk and managing the other factors of production
  - - - Social sustainability: the impact of development that promotes an improvement of quality of life for all now and into the future
        
        Environmental sustainabilty: the impact of development or growth where the effect on the environment is small and easy to managen now and into the future
- - - - supply is proportional to price
        
        Individual supply is the supply of an individual good or service by an consumer
        
        Market supply: the total supply of a good or service by a producer by adding together all the producer's individual supplies
    - - Elastic Price Elasticty of Supply is when the percentage change in quantity supplied is higher than the percentage change in price
        
        Inelastic Price Elasicity of Supply is when the percentage change of quanitity supplied is lower than the percentage change in price
  - - - Law of demand: demand is inversley proportional to price
        
        Dervived demand is when a product's demand increases directly because of the demand of another product
        
        individual demand is the demand of a good or service by an individual consumer
        
        market demand is the demand of a good or service by an economy, found by adding together all of the individual demands
    - - Price Elasticity of demand is the responsiveness of quanitity demanded of a product to a change in price
        
        Elastic Price Elasticity is when the percentage quantity demanded is higher than the percentage change in price
        
        Inelastic Price Elacticity is when the percentage quantity demanded is lower the percentage change in price
- - - - Signalling: Prices signal where resources are needed. If the price rises, more resources are allocated to that area
      - Transmission of Preferences: By making choices producers indicate their needs. Higher prices encourage owners of resources to supply more resources to producers
      - Rationing: When resources are scarce, prices rise so that demand equals supply. Only those willing and able to pay are allocated resources
  - - - Until the price is too high, demand is lower than supply leading to a fall in price until D=S (excess supply)
        
        If the price is too low then demand exceeds supply leading to a rise in price until D=S ( excess demand )
        
        In a market system, prices are means for allocation of resources. Allocation of resources is how resources are distributed among producers and how scarce goods and services are allocated among consumers
        
        Market forces are the factors that determine price levels and availability of goods and services in an economy without government intervention
- - - - This means cutting prices. This leads to more consumer and market share
        
        Those who cant cut prices can go out of business
        
        BUT selling at a price less than the cost of supplying may lead to a disaster
        
        Price Competition is easier for large firms with many products to sell
    - - This meams competing in any way other than price
        
        More obvious is marketing, especially advertsing.; offering a specialist service; offering better consumer experience; offering a better quality product
    - - Monopoly: a sole producer of a good or service
        
        Is able to set price but can not control quanity
        
        In theory, a monopoly will set a higher price and produce a smaller quanityt
        
        Only one firm
        
        In theory,
        
        Usually very large
      - Compettitve markets
        
        normally really small
        
        has multiple firms
        
        The price is set by the market forces of supply and demand
        
        Price and quanity are set by market forces, In theory, price will be lower and quanitty greater
        
        Price and quanityt are both set by market forces. In theory, price would be low and quanity would be high
        
        Competitive markets lead to economic efficiency
      - can be large but may alos have smaller firms
      - Firms can influence price but are constrained by reaction of rivals. may try to collude
      - Both price and quantity depend on how strong competitors are and their ability to collide
      - Usually seen as not being economically efiicient
      - Only a few firms
    - - Posituves
        
        Cheaper prices means that consumers can buy more, leading to a rise in living standards
        
        improved quality of goods and services
        
        Innovation gives consumers more choice
        
        Increased consumer sovreignity
      - Negatives
        
        innovations may be harmful e.g use of pesticiddes on crops
        
        quality might fall if producers cut corners
        
        Marketing may persuade consmers to buy what they do not want
    - - Positives
        
        increase efficiency by: cutting costs to maintain profits, innovating to keep supplying consumers with new products; improving productivity
      - Negatives
        
        lose consumers and possibly go out of business
        
        may have to replace workers with technology- costs money and workers are often consumers