Economics Revenue Concepts and Supply Factors

Total money earned by selling goods or services in a period.

Revenue per unit sold.

Revenue from selling one extra unit.

Producer's willingness and ability to sell a product at a price.

Price of a good or service.

Expenses involved in producing a good or service.

Improvements in production methods, often increasing supply.

Total number of producers supplying a specific good.

Higher prices incentivize greater production, resulting in increased supply. Lower prices discourage production, leading to decreased supply.

Lower production costs lead to more profitable production, which increases supply. Higher production costs decrease supply.

Anticipated future price increases discourage current supply, as producers prefer to wait for higher prices. Conversely, anticipated price drops encourage current supply.

Technological advancements generally increase supply by either increasing production output or decreasing input requirements.

A greater number of sellers usually leads to a higher overall supply of a product. Conversely, fewer sellers result in reduced supply.

Government policies, particularly fiscal policies (taxes and spending), significantly impact supply. Subsidies increase supply, while taxes decrease it.

A firm's primary goal (e.g., revenue maximization or profit maximization) influences its supply decisions.

Various factors, including price, production costs, future expectations, technology, the number of sellers, government policies, and firm goals all affect overall supply of a good or service.

Measures how much the quantity supplied of a good changes in response to a change in its price.

The percentage change in quantity supplied divided by the percentage change in price.

A large change in quantity supplied for a small change in price, indicating a flexible supply.

A small change in quantity supplied for a large change in price, indicating a rigid supply.

The point where supply and demand curves intersect, determining the equilibrium price and quantity.

An inverse relationship between price and quantity demanded: higher price, lower demand.

A direct relationship between price and quantity supplied: higher price, higher supply.

A downward-sloping curve representing the total quantity demanded at different prices for a good or service.

The relationship between the quantity of a good or service supplied and its price. Typically, as prices increase, the quantity supplied increases, and vice-versa.

Situations where the typical relationship between supply and price doesn't hold true. Examples include perishable goods, monopolies, stock clearance, firm closure, and monetization.

Products with a limited shelf life (like fruits and vegetables).

A monopolist, having no competition, can choose to limit supply even if prices are high. They prioritize higher profits over selling more.

When a company sells off excess inventory, often at discounted prices, to make room for new products.

When a company shuts down, it may sell all its remaining inventory at low prices to recover some of its investment.

When a company needs cash quickly, it may sell off products at a lower price to generate immediate income.

Measures how much the quantity supplied of a good or service changes in response to a change in its price.

The price that balances the quantity supplied and the quantity demanded in the market.

The amount of a good or service bought and sold at the equilibrium price.

A situation where the quantity demanded exceeds the quantity supplied at a given price.

A situation where the quantity supplied exceeds the quantity demanded at a given price.

The level of production where a firm earns the highest possible profit.

The necessary condition for a firm to maximize its profit. It indicates that the additional revenue from selling one more unit equals the additional cost of producing that unit.

The sufficient condition for a firm to maximize its profit. It ensures that the firm is actually operating at the profit-maximizing point, not just a point where MR = MC.

A market with many buyers and sellers, all selling identical products. No single firm can influence the price.

A firm that accepts the market price for its product and cannot influence it.

A market with a single seller of a product with no close substitutes.

A firm that can set the price of its product because it has market power.

A market with many firms selling differentiated products, similar but not identical.

Making a product seem unique in the eyes of consumers, even if it's similar to others.

A market with a few dominant firms selling either identical or differentiated products. Each firm's actions impact the others.

Obstacles that prevent new firms from entering a market, often favoring existing firms.