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The Break-Even Point. The break-even point (BEP) in economics, business —and specifically cost accounting —is the point at which total cost and total revenue are equal, i.e. "even". In layman's terms, after all costs are paid for there is neither profit nor loss. [ 1][ 2] In economics specifically, the term has a broader definition; even if ...
Substitute good. In microeconomics, substitute goods are two goods that can be used for the same purpose by consumers. [ 1] That is, a consumer perceives both goods as similar or comparable, so that having more of one good causes the consumer to desire less of the other good. Contrary to complementary goods and independent goods, substitute ...
A market-clearing price is the price of a good or service at which the quantity supplied equals the quantity demanded, also called the equilibrium price. [2] The theory claims that markets tend to move toward this price. Supply is fixed for a one-time sale of goods, so the market-clearing price is simply the maximum price at which all items can ...
Law of supply. The law of supply is a fundamental principle of economic theory which states that, keeping other factors constant, an increase in sales price results in an increase in quantity supplied. [ 1] In other words, there is a direct relationship between price and quantity: quantities respond in the same direction as price changes.
A demand curve is a graph depicting the inverse demand function, [ 1] a relationship between the price of a certain commodity (the y -axis) and the quantity of that commodity that is demanded at that price (the x -axis). Demand curves can be used either for the price-quantity relationship for an individual consumer (an individual demand curve ...
Therefore, the intersection of the demand and supply curves provide us with the efficient allocation of goods in an economy. In microeconomics, the law of demand is a fundamental principle which states that there is an inverse relationship between price and quantity demanded. In other words, "conditional on all else being equal, as the price of ...
A chart pattern or price pattern is a pattern within a chart when prices are graphed. In stock and commodity markets trading, chart pattern studies play a large role during technical analysis. When data is plotted there is usually a pattern which naturally occurs and repeats over a period. Chart patterns are used as either reversal or ...
A good's price elasticity of demand ( , PED) is a measure of how sensitive the quantity demanded is to its price. When the price rises, quantity demanded falls for almost any good ( law of demand ), but it falls more for some than for others. The price elasticity gives the percentage change in quantity demanded when there is a one percent ...