Supply and demand/Related Articles

Definitions

• Consumer surplus [r]: The excess of what a consumer is willing to pay for a product over what he has to pay for it. ^[e]

• Cross elasticity of demand [r]: The percentage change in the quantity demanded of one good as a result of a unit percentage change in the price of another good. ^[e]

• Diminishing returns [r]: The tendency for the output resulting from the employment of an addition unit of a factor of production to fall as the amount of that unit is increased when all other factors of production are held constant (cf economies of scale). ^[e]

• Economies of scale [r]: The factors that cause the cost of production of a product to fall as output of the product is increased. ^[e]

• Elasticity [r]: Please do not use this term in your topic list, because there is no single article for it. Please substitute a more precise term. See Elasticity (disambiguation) for a list of available, more precise, topics. Please add a new usage if needed.

• Elasticity of demand [r]: The percentage change in the amount of a product that is demanded that is caused by a unit percentage change in its price. ^[e]

• Elasticity of substitution [r]: The percentage change in the ratio of the amounts of two products that is demanded that is caused by a unit percentage change in the ratio of their unit prices. ^[e]

• Externality [r]: A cost of production that is not borne by the producer, or a benefit that the producer does not receive. ^[e]

• Giffen good [r]: An "inferior product" for which the amount demanded falls when its price falls (because the increase in income resulting from the price reduction prompts the consumer to switch expenditure to a more expensive product). ^[e]

• Income effect [r]: The tendency of the demand for a product to change in response to a change in its price because the price change has the effect of changing the consumer's income. ^[e]

• Income elasticity of demand [r]: The percentage change in the demand for a product that is caused by a unit percentage change in consumers' incomes. ^[e]

• Incomplete contract [r]: A contract that does not fully specify what each party to it must do under every conceivable circumstance. ^[e]

• Incomplete contract costs [r]: The costs that arise when circumstances not envisaged in an incomplete contract result in a loss of expected benefits or the need for renegotiation. ^[e]

• Marginal utility [r]: The increase in the satisfaction experienced by a consumer caused by a unit increase in his possession of a product. ^[e]

• Nash equilibrium [r]: A situation in game theory in which no player can improve his position, given the responses of the other players. ^[e]

• Market [r]: A term used in commerce and economics to denote a conjunction of buyers and sellers. ^[e]

• Market power [r]: The ability of a supplier to exercise a degree of choice concerning the pricing of a product by restricting its supply: a measure of departure from the ideal of perfect competition in which every supplier is a price-taker ^[e]
• Price elasticity of demand: see elasticity of demand

• Producer surplus [r]: The excess of the revenue that a producer gets from the sale of a product over the minimum that he would be willing to accept for it. ^[e]

• Substitution effect [r]: The tendency of consumers to switch spending to or from a product in response to a change in its price relative to that of a substitute. ^[e]

• Veblen good [r]: A product, the demand for which increases when its price increases because consumers obtain more satisfaction from more expensive products. ^[e]

• Walras' law [r]: The sum of the excess demands in all of the markets in a closed economy is equal to zero. ^[e]

• Wieser's law [r]: The costs of production under competitive conditions are a reflection of the value of the alternatives which are displaced. ^[e]

• Market for lemons [r]: One in which consumers cannot distinguish products of quality from defective goods. ^[e]