Determination of Prices and Quantity — Flashcards

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Price is the amount of money which a buyer pays for one unit of a good or service to the seller. For example, if a buyer pays Rs 36 for one litre of full cream milk, then the price of full cream milk …

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A seller usually wants to earn maximum profit. The price is fixed by considering cost of production, prices fixed by other sellers, and expected sales at different prices. A good price should help sel…

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Profit is the difference between total revenue and total cost. Total revenue is the total money receipts from the sale of a given volume of output, and total cost is the total expenditure incurred in …

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Total revenue is the total money receipts of the producer from the sale of a given volume of output. Total cost is the total expenditure incurred by a seller in the production of that output. These tw…

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Three important factors are cost of production, price fixed by other sellers of similar goods, and expected sales at different prices. These help the seller choose a price that can bring good sales an…

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The aim of a buyer is to get maximum satisfaction by spending minimum. The buyer pays the price to obtain goods and services and tries to use money wisely.

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According to the law of supply, sellers sell more at a higher price and less at a lower price, other factors constant. This happens because a higher price usually gives more incentive to supply the co…

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Equilibrium means a state of balance from where there is no tendency to change. In market price, equilibrium happens when quantity demanded and quantity supplied are equal.