9-3 Supply and Demand
1. Widget: Is a placeholder name for an unnamed, unspecified, or hypothetical manufactured
good or product.
2. Demand function: Is a mathematical equation which expresses the demand of a product or
service as a function of the its price and other factors such as the prices of the substitutes and
complementary goods, income, etc.
3. Demand: Refers to consumers' desire to purchase goods and services at given prices.
4. Supply: Is a fundamental economic concept that describes the total amount of a specific
good or service that is available to consumers.
5. Wholesale price: Is the sum or amount of money for which products or services are offered
for sale to business buyers who are purchasing in larger volumes.
6. Markup: Is the difference between the selling price of a good or service and cost. It is often
expressed as a percentage over the cost.
7. Retail price: Is the final price that a good is sold to customers for, those being the end users
or consumers.
8. Equilibrium: Is the state in which market supply and demand balance each other, and as a
result prices become stable.
9-4 Fixed and Variable Expenses
9. Variable expenses: Are expenses that can change over time. These costs vary depending on
your usage of products or services, and they can change depending on any number of factors.
10. Fixed expenses: Is an expense whose total amount does not change when there is an
increase in an activity such as sales or production.
11. Expense function: Classifying expenses according to the type of work such as selling,
administration, general, and financing.
12. Revenue: Is the income generated from normal business operations and includes discounts
and deductions for returned merchandise.
13. Revenue function: Is that for total revenue in the equation y = bx, where y is the
total revenue, b is the selling price per unit of sales, and x is the number of units sold.
14. Breakeven point: Is the point at which total cost and total revenue are equal, meaning there
is no loss or gain for your small business.
