October 1, 12
Revenue = p*q
Inelastic eg –airlines can increase revenue because quantity won’t change.
Elastic eg tennis balls – lower price quantity demand raises revenue raises
Law of supply
Marginal opportunity cost is additional costs, change with circumstances
Sunk costs are costs that have already been paid so they cannot be recovered.
Marginal opportunity costs
PPF graph – because of the difference in skills of labor increase in marginal
quantity of finger
0 1 2 3 4 5 6
piercings quantity Quantity supplied goes up as price goes up
Price willing to accept quantity supplied
Market supplied sum of supplies of all business willing to produce product service
Law of supply if t