Equilibriu2 - buyers means that prices will never fall very...

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Equilibrium Terms Aggregate Demand - The combined demand of all buyers in a market. Aggregate Supply - The combined supply of all sellers in a market. Average Cost - Average cost incurred per unit of goods produced. Is equal to Total Cost divided by quantity, TC/q. Average Fixed Cost - Average amount of fixed costs incurred per unit of goods produced. Is equal to Total Fixed Costs divided by quantity sold, TFC/q. Average Revenue - Average amount of income generated per unit of goods sold. Is equal to Total Revenue divided by quantity sold, TR/q. Average Variable Cost - Average amount of variable costs incurred per unit of goods produced. Is equal to Total Variable Costs divided by quantity sold, TVC/q. Buyer - Someone who purchases goods and services from a seller for money. Competition - In a market economy, competition occurs between large numbers of buyers and sellers who vie for the opportunity to buy or sell goods and services. The competition among
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Unformatted text preview: buyers means that prices will never fall very low, and the competition among sellers means that prices will never rise very high. This is only true if there are so many buyers and sellers that no single one of them has a significant impact on the market equilibrium. Demand - Demand refers to the amount of goods and services that buyers are willing to purchase. Typically, demand decreases with increases in price, this trend can be graphically represented with a demand curve. Demand can be affected by changes in income, changes in price, and changes in relative price. Demand Curve - A demand curve is the graphical representation of the relationship between quantities of goods and services which buyers are willing to purchase and the price of those goods and services. Equilibrium Price - The price of a good or service at which quantity supplied is equal to quantity demanded. Also called the market-clearing price....
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This note was uploaded on 02/09/2012 for the course ECO ECO2013 taught by Professor Jominy during the Fall '08 term at Broward College.

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