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VERTICAL ADDITION: In graphical analysis, the technique of combining two curves by adding the value of the variable on the vertical or Y axis for a given value of the variable on the horizontal or X axis. This is commonly used for deriving the demand curve for a public good from a set of individual demand curves. The demand price that each individual buyer is willing to pay is added for a given quantity to identify the total benefits obtained.
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Lesson 8: Market Shocks | Unit 2: Determinants
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Page: 5 of 20
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Five basic demand determinants:- Income: For a normal good an increase in income means an increase in demand. For an inferior good an increase in income means a decrease in demand.
- Tastes: If people want more of a good, then demand increases.
- Prices of other goods: A higher price of a substitute good means an increase in demand. A higher price of a complement good means an decrease in demand.
- Buyer's expectations: If buyers expect higher prices tomorrow, they increase demand today.
- Number of buyers: More buyers mean more demand.
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AVERAGE REVENUE, MONOPOLY The revenue received for selling a good per unit of output sold, found by dividing total revenue by the quantity of output. Average revenue often goes by a simpler and more widely used term... price. For a monopoly average revenue is greater than marginal revenue. Average revenue for a monopoly is often depicted by a negatively-sloped average revenue curve.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time flipping through the yellow pages trying to buy either a velvet painting of Elvis Presley or a wall poster commemorating yesterday. Be on the lookout for vindictive digital clocks with revenge on their minds.
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Junk bonds are so called because they have a better than 50% chance of default, carrying a Standard & Poor's rating of CC or lower.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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WAPM
Weak Axiom of Profit Maximization
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