What is marginal cost?
The additional opportunity cost of increasing quantity supplied changing with circumstances
What is similar about demand and supply choices?
They are both made considering alternatives.
Demand - alternative products
Supply - alternative uses for your time
What is different about demand and supply choices?
Demand - the more you buy the lower the maximum you will pay becomes
Supply - the more you supply the more the minimum payment needed increases
What are sunk costs?
Past expenses that can’t be reversed or recovered
What is supply?
Businesses willingness to produce a product or service because their opportunity costs are covered by their price
What is marginal opportunity cost?
The term applying to any cost relevant to a smart decision
What is the law of supply?
If the price of a product increases the quantity supplied increases
What are the six ways to shift a supply curve?
- Technology
- Environment
- Price of inputs
- Price of related products
- Expected future prices
- Number of businesses
