1. Understanding Markets Key Terms

2. Compliments Products that are used together such as a toothbrush and toothpaste; increase in price of one decreases demand of other.

3. Demand The desire, ability, and willingness to buy a product.

4. Elasticity Shows how responsive quantity is to a change in price.

5. Equilibrium The point where the Supply Curve & Demand Curve meet; Helps set price.

6. Incentive Something that motivates.

7. Long Run Production period long enough to change amount of inputs used in production.

8. Monopoly Market structure characterized by a single producer; a form of imperfect competition.

9. Oligopoly Market structure in which a few large sellers dominate and have the ability to affect prices in the industry; form of imperfect competition.

10. Perfect Competition Market structure with a large number of well- informed buyers and sellers who exchange identical products and have freedom of entry and exit.

11. Price Monetary value of a product.

12. Short Run Production period so short only variable inputs can be changed.

13. Substitutes Competing products that can be used in place of one another; increase in the price of one increases demand for the other.

14. Supply Amount of a product offered for sale.

15. Trust Illegal combination of corporations or companies organized to suppress competition.

16. After you write the definitions… Write a 1 paragraph story using 5 or more of today’s key terms.

17. Quiz Terms Compliments 10, C Demand 7, A Elasticity 1, b Equilibrium 6, H Monopoly 4, F Oligopoly 8, I Perfect Competition 3, G Substitutes 9, E Supply 2, J Trust 5, D