Understanding Markets
Key Terms
Compliments
Products that are used together such as a toothbrush
and toothpaste; increase in price of one decreases
demand of other.
Demand
The desire, ability, and willingness to buy a product.
Elasticity
Shows how responsive quantity is to a change in
price.
Equilibrium
The point where the Supply Curve & Demand Curve
meet; Helps set price.
Incentive
Something that motivates.
Long Run
Production period long enough to change amount of
inputs used in production.
Monopoly
Market structure characterized by a single producer;
a form of imperfect competition.
Oligopoly
Market structure in which a few large sellers
dominate and have the ability to affect prices in the
industry; form of imperfect competition.
Perfect Competition
Market structure with a large number of wellinformed buyers and sellers who exchange identical
products and have freedom of entry and exit.
Price
Monetary value of a product.
Short Run
Production period so short only variable inputs can
be changed.
Substitutes
Competing products that can be used in place of one
another; increase in the price of one increases
demand for the other.
Supply
Amount of a product offered for sale.
Trust
Illegal combination of corporations or companies
organized to suppress competition.
After you write the
definitions…
Write a 1 paragraph story
using 5 or more of today’s
key terms.
Quiz Terms
Compliments 10, C
Oligopoly 8, I
Demand 7, A
Perfect Competition 3, G
Elasticity 1, b
Substitutes 9, E
Equilibrium 6, H
Supply 2, J
Monopoly 4, F
Trust 5, D