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When the supply curve shifts from S1 to S2, the equilibrium price decreases from P1 to P2, and an increase in quantity demanded from Q1 to Q2 is induced.. In economics, induced demand – related to latent demand and generated demand [1] – is the phenomenon whereby an increase in supply results in a decline in price and an increase in consumption.
In microeconomics, a production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB) is a graphical representation showing all the possible options of output for two that can be produced using all factors of production, where the given resources are fully and efficiently utilized per unit time.
A curve of output against input. The areas of increasing, diminishing and negative returns are identified at points along the curve. There is also a point of maximum yield which is the point on the curve where producing another unit of output becomes inefficient and unproductive.
The inverse of the relationship, y = f (x), is the graphical representation of Marshall’s derived demand curve for the selected factor of production. [2] Its equilibrium price and quantity are determined by the intersection of this demand curve with the supply curve of the factor of production.
The shift from D1 to D2 means an increase in demand with consequences for the other variables. 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).
A study attempted to quantify the costs of cars (i.e. of car-use and related decisions and activity such as production and transport/infrastructure policy) in conventional currency, finding that the total lifetime cost of cars in Germany is between 0.6 and 1.0 million euros with the share of this cost born by society being between 41% (€4674 ...
The more variable costs used to increase production (and hence more total costs since TC=FC+VC), the more output generated. Marginal costs are the cost of producing one more unit of output. It is an increasing function due to the law of diminishing returns , which explains that is it more costly (in terms of labour and equipment) to produce ...
There is a distinction between two types of economies of scale: internal and external. An industry that exhibits an internal economy of scale is one where the costs of production fall when the number of firms in the industry drops, but the remaining firms increase their production to match previous levels.