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NASH EQUILIBRIUM: A concept from Game Theory which establishes that a set of strategies followed by economic agents within a game is in equilibrium if, holding the strategies of all other economic agents constant, no economic agent can obtain a higher payoff by choosing a different strategy. For example, when firms operate within an oligopoly, once a Nash equilibrium has been reached, none of them will want to change their strategy because by doing it they cannot obtain a higher profit.
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Lesson 6: Market Supply | Unit 2: Law of Supply
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Page: 5 of 19
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The law of supply is the basic principle underlying supply. A definition: The law of supply is a direct relationship between supply price and the quantity supplied, ceteris paribus. - Direct relationship means that people sell more of a good if the price is higher and less if the price is lower.
- The law of supply is not as rigid as the law of demand. The price and the quantity supplied are not always directly related. Higher prices could cause an increase or a decrease in the quantity supplied.
Ceteris paribus is also important to the law of supply.- Ceteris paribus means other things remain unchanged.
- Law of supply applies exclusively to the relationship between supply price and quantity supplied.
- All other things that can affect supply must remain constant to avoid distorting this relationship.
- Because supply is affected by many factors other than price, the price/quantity supply relationship can get lost when other things change.
- Other factors that affect supply are called supply determinants.
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FACTOR DEMAND DETERMINANTS The three most important determinants that shift the factor demand curve are: (1) product price, (2) factor productivity, and (3) prices of other factors. Comparable to any determinant, these three cause the factor demand curve to shift to a new location. An increase in factor demand is a rightward shift of the factor demand curve and a decrease in factor demand is a leftward shift.
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BEIGE MUNDORTLE
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Today, you are likely to spend a great deal of time flipping through the yellow pages seeking to buy either a coffee cup commemorating next Thursday or a replacement remote control for your stereo system. Be on the lookout for strangers with large satchels of used undergarments.
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A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
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"The greatest things ever done on Earth have been done little by little. " -- William Jennings Bryan
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EU
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