Economics Terms

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Elasticity

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The degree to which the quantity demanded or supplied of a good or service changes in response to a change in price.

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Inelastic

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A situation in which the quantity demanded or supplied of a good or service is not significantly affected by changes in price.

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Price Ceiling

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A government-imposed limit on how high a price can be charged on a product.

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Price Floor

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A government-imposed limit on how low a price can be charged on a product.

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Substitute

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A product or service that can be easily replaced with another by consumers.

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Complement

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A product or service that is used in conjunction with another product or service.

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Marginal Cost

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The cost of producing one additional unit of a good or service.

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Marginal Benefit

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The additional satisfaction or utility gained from consuming one more unit of a good or service.

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Efficiency

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The optimal production and allocation of resources to maximize output and minimize waste.

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Regulation

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Rules or directives made and maintained by an authority to regulate conduct.