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LAW OF SUPPLY: The direct relationship between supply price and the quantity supplied, ceteris paribus. This fundamental economic principle indicates that as the price of a commodity increases, then the quantity of the commodity that sellers are able and willing to sell in a given period of time, if other factors are held constant, also increases. This law, while not quite as iron-clad as the law of demand, is quite important to the study of markets.
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Lesson 23: Factor Market Equilibrium | Unit 1: Intro
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Page: 3 of 24
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- Let's review the notion of equilibrium.
- Equilibrium is the state that exists due to a balance between opposing forces, which remains unchanged until another force intervenes.
- Once achieved, equilibrium persists unless or until it is disrupted by an outside force.
- Equilibrium in the factor market works much the same, with the two opposing forces being:
- Factor Demand
- Factor Supply
- When these two opposing forces of factor demand and factor supply are in balance, we have factor market equilibrium.
- Should the factor market be out of equilibrium, then like any other market, it can experience a surplus or a shortage.
- A factor market surplus, especially in labor markets, is more commonly termed unemployment.
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AVERAGE FACTOR COST Total factor cost per unit of factor input employed by a firm in the production of output, found by dividing total factor cost by the quantity of factor input. Average factor cost, abbreviated AFC, is generally equal to the factor price. However, using the longer term average factor cost makes it easier to see the connection to related terms, including total factor cost and marginal factor cost.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time at a flea market looking to buy either a remote controlled sports car with an air spoiler or semi-gloss photo paper that works with your neighbor's printer. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.
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The first U.S. fire insurance company was established by Benjamin Franklin in 1752 in Philadelphia.
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"You miss 100% of the shots you never take. " -- Wayne Gretzky, hockey player
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NLREG
Nonlinear Statistical Regression
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