Demand Curve: A Commodity Demand and Prices

1) demand curve: a commodity demand and prices of its image as a function of.

2) indifference curve: in the preferences under the same conditions, consumers from this point on the curve represents combinations of goods get satisfaction is the same. The indifference curve, as far away from the origin the indifference curve represents the higher degree of satisfaction.

3) equilibrium price: is the price of goods supply and demand curves intersect. Is the supply and demand of goods, prices of commodity supply and demand prices prices are equal.

4) consumer surplus: consumer satisfaction derived from commodity than it is part of the price paid. As consumers of the last product in accordance with marginal utility decided the price of everything, and this final product is greater than the marginal utility of goods before this final product, this is greater than the parts, consumers are not paying for it.

5) income elasticity: changes in commodity demand a degree of response to income changes. Income elasticity greater than 1 is a luxury item, is a necessity between the 0--1, less than 0 are inferior goods.

6) cross-elasticity: refers to the comparison of percentage changes in commodity demand responsiveness of the percentage changes in commodity prices. Are complementary commodities cross-elasticity is less than 0, greater than 0 are alternative, related merchandise is not equal to 0

7) marginal rate of technical substitution: refers to a ratio of production factors another factor of production, it is marginal compared to the output of the two production factors in the bottom. Because of diminishing marginal output, replaced by a single factor of production volume and fewer of another factor of production, which is