Examlex
Suppose a decrease in world demand for potash (used in the production of fertilizer) decreases the price by 5 percent.Annual Canadian production decreases by 2 percent.What is the elasticity of supply of Canadian potash?
Classical Model
An economic theory that suggests markets function best with minimal government intervention and that supply and demand are the primary forces driving the economy.
Self-Regulating Market
A market mechanism in which market forces such as supply and demand are allowed to operate freely without external intervention, theoretically leading to efficient outcomes.
Say's Law
An economic theory that proposes supply creates its own demand, meaning production inherently creates the consumption of equivalent value.
Aggregate Supply Curve
This represents the total supply of goods and services that firms in an economy are willing to sell at a given price level during a specified time period.
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