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AGGREGATE DEMAND CURVE: A graphical representation of the relation between aggregate expenditures on real production and the price level, holding all ceteris paribus aggregate demand determinants constant. The aggregate demand, or AD, curve is one side of the graphical presentation of the aggregate market. The other side is occupied by the aggregate supply curve (which is actually two curves, the long-run aggregate supply curve and the short-run aggregate supply curve). The negative slope of the aggregate demand curve captures the inverse relation between aggregate expenditures on real production and the price level. This negative slope is attributable to the interest-rate effect, real-balance effect, and net-export effect.
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Lesson 19: Monopolistic Competition | Unit 1: Intro
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Page: 4 of 22
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Topic:
Product Differentiation
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- The characteristic that sets monopolistic competition apart from other market structures is product differentiation.
- Product differentiation is real or perceived differences among similar goods that prompts buyers to pay different prices.
- Product differentiation is achieved in three ways:
- Physical Differences
- Perceived Differences
- Support Services
- When monopolistic competition firms practice product differentiation they seek to balance two things.
- To create enough of a difference that buyers are willing to pay a higher price for the good.
- To maintain enough similarity that buyers treat the good as a close substitute for other goods.
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AGGREGATE EXPENDITURES EQUATION An equation that summarizes the four aggregate expenditures on gross domestic product by the four macroeconomic sectors. In the study of Keynesian economics, this equation is commonly used to summarize the demand side of the macroeconomy. The aggregate expenditures equation actually comes in three different versions depending on how many of the four sectors and their expenditures are included.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales hoping to buy either a coffee cup commemorating the moon landing or a how-to book on surfing the Internet. Be on the lookout for pencil sharpeners with an attitude.
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"Far and away the best prize that life has to offer is the chance to work hard at work worth doing." -- Theodore Roosevelt, 26th US president
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SEHK
Stock Exchange of Hong Kong
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