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LAW OF DIMINISHING MARGINAL RETURNS: A principle stating that as more and more of a variable input is combined with a fixed input in short-run production, the marginal product of the variable input eventually declines. This is THE economic principle underlying the analysis of short-run production for a firm. Among a host of other things, it offers an explanation for the upward-sloping market supply curve. How does the law of diminishing marginal returns help us understand supply? The law of supply and the upward-sloping supply curve indicate that a firm needs to receive higher prices to produce and sell larger quantities. Why do they need higher prices?
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Lesson 6: Market Supply | Unit 1: Selling Basics
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Page: 4 of 19
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- Supply as the range of prices and quantities that sellers are willing and able to sell at different prices.
- Why sellers must be both willing and able to sell a good to have a supply. While willingness can influence some supply, ability, which is based on production cost, is more important.
- Why supply includes a range of prices and quantities, not just a specific quantity.
- Why supply is analyzed during a given time period.
- That supply price as the minimum price sellers would be willing and able to accept for a given quantity.
- That quantity supplied is the specific quantity sellers would be willing and able to sell at a specific price.
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TOTAL FACTOR COST, PERFECT COMPETITION The opportunity cost incurred by a perfectly competitive firm when using a given factor of production to produce a good or service. This is the total cost associated with the use of a particular resource or factor of production--it is the total cost of the factor. For a perfectly competitive firm, the price paid is constant and total factor cost increases at a constant rate. Total factor cost is predominately used in the analysis of the factor market. Two derivative factor cost measures are average factor cost and marginal factor cost.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors trying to buy either a handcrafted spice rack or a cell phone case. Be on the lookout for mail order catalogs with hidden messages.
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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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"Lord, where we are wrong, make us willing to change; where we are right, make us easy to live with. " -- Peter Marshall, US Senate chaplain
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TSP
Time Series Processor (software)
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