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SHUTDOWN RULE, MONOPOLY: The marginal revenue and marginal cost approach to analyzing a monopoly firm's short-run production decision can be used to identify circumstances in which a firm minimizes losses by shutting down production in the short run. If the market price falls below average total cost, it must decide if the economic loss from producing the quantity of output that equates marginal revenue and marginal cost is more or less than the economic loss incurred with shutting down production in the short run (which is equal to total fixed cost).
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Lesson 15: Aggregate Market | Unit 1: The Concept
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Page: 4 of 22
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The aggregate market combines two sides, those who buy, aggregate demand, and those who sell, aggregate supply.- Aggregate demand is the spending by the four basic sectors of the economy: household, business, government, and foreign sector.
- Aggregate supply is the economy's producers -- the factors of production: labor, capital, land, and entrepreneurship.
- The aggregate market is the mechanism through which buyers and sellers come together to exchange the economy's production.
The AD curves represents the demand side of the aggregate market.
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DEMAND-PULL INFLATION Inflation that results from increases in aggregate demand that exceed any increases in aggregate supply. This type of inflation results when the four macroeconomic sectors (household, business, government, and foreign) collectively try to purchase more output than the economy is capable of producing. The alternative type of inflation is cost-push inflation.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time touring the new suburban shopping complex seeking to buy either an ink cartridge for your printer or a rechargeable battery for your camera. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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This isn't me! What am I?
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The first paper notes printed in the United States were in denominations of 1 cent, 5 cents, 25 cents, and 50 cents.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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ABA
American Bankers Association, Associate in Business Administration
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