| A | B |
|---|
| Supply | the amount of a good or a service that producers will provide at a given price |
| Demand | the amount of a good or a service that consumers will purchase at a given price |
| Law of Supply | there is a direct relationship between price and supply |
| Law of Demand | there is an inverse relationship between price and demand |
| substitutes | goods that can be purchased instead of another good |
| fixed cost | costs that remain the same regardless of the level of produciton |
| variable cost | costs that change with the level of production |
| marginal cost | the cost of producing one more item |
| break event point | the number of items that must be sold at a given price to cover production costs |
| microeconomics | the study of individual units within the economy |
| compliments | goods that are usually purchased along with another good |
| surplus | when supply exceeds demand |
| shortage | when demand exceeds supply |
| Principle of Diminishing Marginal Utility | at some point lowering the price will not increase demand |
| law of variable proportions | as input is changed output will be changed |
