Microeconomic Key Definitions

Key definitions to help you get full marks on a 5 mark question!

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Black market
An illegal market where products are bought and sold at unofficial prices.
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Inferior goods
As income rises, demand for this type of good falls.
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Contestable market
A market that has no, or limited barriers to entry.
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Scarcity
Where demand exceeds supply at a zero price point.
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Market equilibrium
Where demand equals supply.
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Price discrimination
Charging different prices to different consumers for the same good or service.
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Complementary goods
Two goods in joint demand.
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Fixed costs
Costs that do not change with firms output.
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Sunk costs
Costs that cannot be recovered if a firm decides to leave an industry.
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Joint supply
Increase in supply of one good leads to increased supply of another
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Other cards in this set

Card 2

Front

As income rises, demand for this type of good falls.

Back

Inferior goods

Card 3

Front

A market that has no, or limited barriers to entry.

Back

Preview of the back of card 3

Card 4

Front

Where demand exceeds supply at a zero price point.

Back

Preview of the back of card 4

Card 5

Front

Where demand equals supply.

Back

Preview of the back of card 5
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