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PERFECT COMPETITION, SHUTDOWN: A perfectly competitive firm is presumed to shutdown production and produce no output in the short run, if price is less than average variable cost. This is one of three short-run production alternatives facing a firm. The other two are profit maximization (if price exceeds average total cost) and loss minimization (if price is greater than average variable cost but less than average total cost).

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Lesson 6: Supply | Unit 1: Selling Basics Page: 3 of 19

Topic: Quantity Supplied <=PAGE BACK | PAGE NEXT=>

Second, quantity supplied.

Quantity supplied is the specific quantity of a good that sellers would be willing and able to sell at a specific price.

  • Price and quantity supplied are a pair of numbers that go together.
Quantity supplied is not the same as supply.
  • Supply is the entire range of prices and quantities (all pairs of numbers).
  • Quantity supplied is a specific quantity at a specific price (a quantity paired with a price).

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INFLATIONARY EXPECTATIONS, AGGREGATE DEMAND DETERMINANT

One of several specific aggregate demand determinants assumed constant when the aggregate demand curve is constructed, and that shifts the aggregate demand curve when it changes. An increase in the inflationary expectations causes an increase (rightward shift) of the aggregate curve. A decrease in the inflationary expectations causes a decrease (leftward shift) of the aggregate curve. Other notable aggregate demand determinants include interest rates, federal deficit, and the money supply.

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Today, you are likely to spend a great deal of time at a going out of business sale looking to buy either a T-shirt commemorating the 2000 Olympics or a genuine fake plastic Tiffany lamp. Be on the lookout for mail order catalogs with hidden messages.
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The average bank teller loses about $250 every year.
"The greatest things ever done on Earth have been done little by little. "

-- William Jennings Bryan

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