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Biz/ed have put together many of the main Economics and Business diagrams in this feature. You may want to use these for your project or coursework assignment, or you may simply want to use them for revision or checking out what they mean. Each diagram has both a brief and detailed explanation of what it shows and links to other relevant diagrams and definitions in the Biz/ed glossary.

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Diagrams in the field of economics. Diagrams are distinct from charts and graphs in the sense that they are based on economic model, and not real figures, demonstrating an abstract concept rather than a real life scenario as a graph might.

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Long-run equilibrium of a firm under monopolistic competition, demonstrating that it makes only normal profit.

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Short-run equilibrium of a monopoly, oligopoly, or a firm under monopolistic competition. The grey box illustrates abnormal profit, though the firm could just as easily be making a loss. The same diagram could equally represent the longrun equilibria of monopoly and oligopoly.

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Diagram showing a firm in imperfect competition (e.g. a monopoly) - when price regulation forced it to decrease its price from P to Preg. The profit maximising firm therefore chooses to expand output from Q to Qreg. Its economic profit is reduced, but not removed entirely; for the government's point of view, allocative efficiency is achieved. The diagram has been slightly simplified. Technically, the regulation would cause the MR curve to be malformed, but to no particular consequence other than the common sense one of reduced prices. The costs at Q and Qreg are shown as equal merely out of convenience.

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The model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure.

Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates.

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Very often, a change in the price of one product leads to a change in the demand for another, economists call this the cross-price effect and this is the focus of this chapter.

Cross price elasticity (CPed) measures the responsiveness of demand for good X following a change in the price of good Y (a related good). We are mainly concerned here with the effect that changes in relative prices within a market have on the pattern of demand.

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Income elasticity of demand measures the relationship between a change in quantity demanded and a change in income. The basic formula for calculating the coefficient of income elasticity is:

Percentage change in quantity demanded of good X divided by the percentage change in real consumers' income

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An actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter.

Markets include mechanisms or means for (1) determining price of the traded item, (2) communicating the price information, (3) facilitating deals and transactions, and (4) effecting distribution. The market for a particular item is made up of existing and potential customers who need it and have the ability and willingness to pay for it.

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What Does Factors Of Production Mean? An economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. The factors of production include land, labor, capital and entrepreneurship Read more: http://www.investopedia.com/terms/f/factors-production.asp#ixzz1XmW3I4i1

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In this note we consider production costs in the short run, in particular the difference between fixed and variable costs and the relationships between marginal and average costs.

In the short run, because at least one factor of production is fixed, output can be increased only by adding more variable factors. Hence we consider both fixed and variable costs

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An elasticity alternative in which infinitesimally small changes in one variable (usually price) cause infinitely large changes in another variable (usually quantity). Quantity is infinitely responsive to price. Any change in price, no matter how small, triggers an infinite change in quantity. This characterization of elasticity is most important for the price elasticity of demand and the price elasticity of supply. Perfectly elastic is one of five elasticity alternatives. The other four are perfectly inelastic, relatively elastic, relatively inelastic, and unit elastic.

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An elasticity alternative in which changes in one variable (usually price) do NOT cause any changes in another variable (usually quantity). Quantity is totally, completely unresponsive to price. Quantity just does not change, regardless of changes in price. This characterization of elasticity is most important for the price elasticity of demand and the price elasticity of supply. Perfectly inelastic is one of five elasticity alternatives. The other four are perfectly elastic, relatively elastic, relatively inelastic, and unit elastic.

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Whether you manage an organization, a department, or a project, one of your principal objectives is to be as profitable as you can. To accomplish this, you'll probably seek to minimize your costs and other outgoings

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Key Points

Although the phrase "supply and demand" is commonly used, it's not always understood in proper economic terms. The price and quantity of goods and services in the marketplace are largely determined by (a) consumer demand and (b) the amount that suppliers are willing to supply.

Demand and supply can be graphed as curves – and the two curves meet at the equilibrium price and quantity. The market tends to naturally move toward this equilibrium – and when total demand and total supply shift, the equilibrium moves accordingly. It's an interesting relationship that determines much of what happens in a free market economy. If you understand how these factors influence pricing, supply, and purchasing decisions, it will help you analyze the market and make better price and supply decisions for your company.

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The most common example of graphs used in economics is a graph with quantity on the x axis, and price on the y axis. This type of graph allows for two variables to be shown over time i.e. graphs where you can potentially see relationships between variables.