Complementary goods – goods that
are often purchased together, such as bread and butter.
Demand curve – the
graphical representation of the demand function. The demand function relates price and quantity
demanded. It tells how many units of a good will be purchased at different prices. In
general, at higher prices, less will be purchased, so demand curves slope downward. The market demand function is calculated by adding up all of the
individual consumersÕ demand functions.
Demand function – the
mathematical function that relates price and quantity demanded for goods or services. It tells how many units of a good will be purchased at different prices. The market demand function is calculated by adding together all of the individual consumersÕ demand
functions.
Discount rate – the rate
used to reduce future benefits and costs to their present time equivalent.
Economic efficiency – the
allocation of goods to their highest relative economic value.