| A | B |
|---|
| price definition | amount of money item sells for |
| Change in Price | Anything that changes S and D causes this |
| buying power | factor that affects how much customer pays b/c of income |
| business use of relative price | business comparing cost of itmes to sell |
| what's profitable | how producers answer what to produce |
| lowest cost | how producers combine resources |
| information | what everyone needs to make economic decisions |
| profits | incentives to reallocate resources |
| ration limited resources | way price is used in marketplace |
| People who have money | Who gets goods in market economy |
| price | what supply and demand interact to determine |
| Sales go up | what happens when price is lowered |
| Demand Goes down | what happens when price is increased |
| Equilibrium price | consumer purchases = producers amounts |
| excesss supply | production > buyers wants and abilities |
| Lower prices or offer discounts | what producers do if s > D |
| when excess demand is eliminated | when consumers buy more than producers have to sell |
| excess supply will result | what happens when price is higher than equilibrium price |
| market price | actual price that prevails in the marketplace and excess S and D causes changes in this |
| value | price is based on consumers opinion of this |
