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Microeconomics Vocabulary
Individual and firm-level economic behavior
10 words
All 10 Words
supply and demand
/səˌplaɪ ənd dɪˈmænd/the relationship between availability and desire that determines price
“Supply and demand set the equilibrium price of wheat.”
elasticity
/ˌiˌɫæsˈtɪsəti/the responsiveness of demand or supply to price changes
“Luxury goods have high price elasticity of demand.”
marginal cost
/ˌmɑːrdʒɪnəl ˈkɒst/the cost of producing one additional unit
“Firms maximize profit where marginal cost equals marginal revenue.”
equilibrium
/ˌikwəˈɫɪbɹiəm/a state where supply equals demand
“The market reaches equilibrium at $50 per unit.”
scarcity
/ˈskɛɹsɪti/the fundamental economic problem of unlimited wants and limited resources
“Scarcity forces societies to make allocation choices.”
utility
/juˈtɪɫəti/the satisfaction or benefit derived from consuming a good
“Economists measure utility to understand consumer choices.”
monopoly
/məˈnɑpəɫi/a market with only one seller
“The utility company operates as a regulated monopoly.”
oligopoly
/ˌɑɫɪˈɡɑpəɫi/a market dominated by a few large sellers
“The airline industry is an oligopoly.”
perfect competition
/ˌpɜːrfɪkt ˌkɒmpɪˈtɪʃən/a market with many buyers and sellers trading identical products
“Agricultural commodities approach perfect competition.”
price discrimination
/ˈpraɪs dɪˌskrɪmɪˈneɪʃən/charging different prices to different customers for the same product
“Student discounts are a form of price discrimination.”
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