1. Unit 3: Supply & Demand
Study Blue Vocabulary

2. DEMAND
The quantity of a good or service that consumers are willing and able to buy at various prices

3. SUPPLY
The quantity of a good or service that producers are willing and able to offer for sale at various prices

4. CONSUMER
A person who purchases goods and services for personal use

5. SUBSTITUTE GOODS
A product that satisfies the same basic want as another product

6. COMPLEMENTARY GOODS
A product that is used or consumed jointly with another product; tennis rackets and tennis balls are one example

7. LAW OF DIMINISHING MARGINAL UTILITY
The general observation that as the quantity of a good or service consumed increases, the benefits for the consumer of each additional unit decrease

8. REVENUE
The amount of money a firm receives in the course of doing business

9. PROFIT
The money earned by a business after subtracting its operation costs

10. DEMAND SHIFTERS
Factors other than price that can cause a change in demand for a good or service; examples include changes in consumer income or tastes

11. SUPPLY SHIFTERS
Factors other than price that can cause a change in the supply of a good or service; examples include changes in technology and government policy

12. ELASTICITY
A measure of the degree to which the quantity demanded or supplied of a good or service changes in response to a change in price

13. COMPETITION
Rivalry among sellers to achieve higher profits; usually leads to a decrease in price of the product and a greater variety of products

14. ENTREPRENEUR
A person who assembles and organizes the resources necessary to produce goods and services