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PERFECT COMPETITION, TOTAL ANALYSIS: A perfectly competitive firm produces the profit-maximizing quantity of output that generates the greatest difference between total revenue and total cost. This total approach is one of three methods that used to determine the profit-maximizing quantity of output. The other two methods involve the direct analysis of economic profit or a comparison of marginal revenue and marginal cost.
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AGGREGATE DEMAND DETERMINANTS: An assortment of ceteris paribus factors that affect aggregate demand, but which are assumed constant when the aggregate demand curve is constructed. Changes in any of the aggregate demand determinants cause the aggregate demand curve to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate demand curve to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate demand curve. If any determinant affects aggregate demand it MUST affect one of these four expenditures. See also | aggregate demand | aggregate expenditures | aggregate market | aggregate market analysis | price level | real production | aggregate demand curve | consumption expenditures | investment expenditures | government purchases | net exports | household sector | business sector | government sector | foreign sector | macroeconomics | interest rate | taxes | disposable income | business cycle | inflation | unemployment | money supply |
Recommended Citation:AGGREGATE DEMAND DETERMINANTS, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: May 9, 2024].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: aggregate demand determinants
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AGGREGATE DEMAND INCREASE, SHORT-RUN AGGREGATE MARKET A shock to the short-run aggregate market caused by an increase in aggregate demand, resulting in and illustrated by a rightward shift of the aggregate demand curve. An increase in aggregate demand in the short-run aggregate market results in an increase in the price level and an increase in real production. The level of real production resulting from the shock can be greater or less than full-employment real production.
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