| A | B |
|---|
| law of supply | producers supply more goods when prices are higher |
| profit | total revenue minus cost of production |
| costs of production | wages, rent and interest on loans |
| elastic supply | exists when goods can be made quickly, cheaply and with few resources |
| inelastic supply | exists when goods require a lot of time, money and resources |
| determinants of supply | nonprice factors that can shift the entire supply curve |
| tax | a required payment of money to the government |
| subsidies | payments by the government to private businesses |
| regulations | passed by the government to protect the public |
| marginal product | the change in output generated by adding one more unit of input |
| law of diminishing returns | adding more units of production increases to a point, then decreases |
| total product | the product a company makes in a given period of time |
| fixed costs | rent, loan interest, taxes and salaries |
| depreciation | lessening in value |
| overhead | a company's total fixed costs |
| variable costs | includes raw material and wages |
| total costs | fixed costs + variable costs |
| marginal costs | the costs of adding one more unit of output |
