Term Definition Consumer Goods/Services - Products or services directly used by people to satisfy their wants. Producer Goods/Services - Goods used to produce consumer goods or other producer goods. Necessities - Products required to support human life, purchased in similar quantities despite price changes. Luxuries - Desired products purchased after necessities are obtained if money is available. Supply - The quantity of a product or service available to be sold. Demand - The quantity of a commodity bought at a certain price in a given place and time. Elastic Demand - When the quantity demanded is highly responsive to price changes. Inelastic Demand - When the quantity demanded is relatively unresponsive to price changes. Perfect Competition - Market structure with many vendors, none able to influence market prices. Monopoly - A market where a single vendor supplies a unique product and blocks new vendors. Monopsony - A market with a single buyer, who exerts control over prices and purchase quantities. Oligopoly - A market with few suppliers, where one’s actions affect others. Oligopsony - A market with few buyers who together influence price and quantity of goods. Law of Diminishing Returns - Economic principle that as more of one input is added, the incremental output will eventually decrease.
