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The short-run is defined as the period during which one cannot vary at least one of the factors of production, i.e. at least one factor of production is fixed. The long-run is defined as the period during...

Price elasticity of demand (PED) is a measure of the responsiveness of demand for a product after a change in that product’s price. It is calculated with the following formula: PED = %change in quantity d...

the crowding out effect refers to the possible effect that a government deficit-financed fiscal policy may have on real interest faced by the private sector. Its effect is a reduction in the desired effec...

Supply is the quantity of a certain product that a producer is willing and able to supply into a market at a given price, in a given time period. Consider the market for rice: an abnormally fruitful harve...

An externality is a benefit or a cost borne by a third party when producing or consuming a good. Hence there can be negative and positive externalities of production and consumption. E.g. Cigarettes have ...