| Term | Definition |
| Microeconomics | Interaction of people in buisness |
| Cicular Flow Diagram | * |
| Labor | * |
| Supply | the amount of goods available |
| Demand | the desire to own something and the ability to pay for it |
| Law of Demand | Consumers will buy more of a good when its price decreases; if the price increases it won't be wanted as much |
| Law of Supply | The idea that producers offer more of a good as its price increases and less as its price falls |
| Factors that effect supply | * |
| Price Floor | the minimum price allowed for a good |
| Price Ceiling | the maximum price allowed for a good (legally) |
| Factors that effect demand | * |
| Price Elasticity | * |
| Inelastic | describes how demand is not very sensitive to changes in price |
| Sole proprietorship | a business owned and run by one person |
| Partnership | a business jointly owned by 2 or more people |
| Corporation | a business organization that is owned by stockholders and recognized by laws as a 'separate legal entity having all the rights as an individual' |
| Monopoly | [ex.POWER COMPANY]
* one seller
* no close substitutes for product
* impossible entry
* price-setting power
* no non-price competition |
| Natural monopoly | * |
| Oligopoly | [ex. CAR MANUFACTURE]
* few sellers
* differentiated or homogenous product
* difficult entry
* considerable price-setting power
* considerable non-price competition |
| Monopolistic competition | [ex. GAS STATION]
* many sellers
* differentiated product
* relatively easy-entry
* some price setting power
* considerable non-price competition
* usues a great deal of advertising (giveaways and prizes) |
| Perfect competition | [ex. FOOD] {like Fruity O's, Fruit Loops, Rainbow Hoops... same thing}
* many sellers
* homogenous product
* very easy entry
* no price-setting power
* no non-price competition
* price-takers |
