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FACTOR MARKET EQUILIBRIUM: Equilibrium in the factor market, which for a perfectly competitive market is achieved at the factor price and factor quantity give by the intersection of the factor demand curve and the factor supply curve. For factor markets that are not perfectly competitive, such as those controlled by monopoly or monopsony, factor market equilibrium is achieved when the controlling firm maximizes profit. For monopoly, this is the factor quantity that equates marginal revenue and marginal cost. For monopsony, this is the factor quantity that equates marginal revenue product with marginal factor cost. But regardless of marginal structure, as an equilibrium it is maintained until shocked by an external force.
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LAW OF SUPPLY The direct relationship between supply price and the quantity supplied, assuming ceteris paribus factors are held constant. This economic principle indicates that an increase in the price of a commodity results in an increase in the quantity of the commodity that sellers are willing and able to sell in a given period of time, if other factors are held constant. The law of supply is an important principle in the study of economics.
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BROWN PRAGMATOX
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Today, you are likely to spend a great deal of time flipping through mail order catalogs looking to buy either a rechargeable battery for your camera or a coffee cup commemorating the first day of spring. Be on the lookout for rusty deck screws.
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Ragnar Frisch and Jan Tinbergen were the 1st Nobel Prize winners in Economics in 1969.
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"The time to repair the roof is when the sun is shining." -- John F. Kennedy, 35th U. S. president
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JE
Journal of Econometrics
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