Absolute (Money) Price

Conglomerate Merger A merger
between companies in different industries.
Constant-Cost Industry An industry
in which average total costs do not change
as (industry) output increases or decreases
when firms enter or exit the industry,
respectively.
Constant Returns to Scale The
condition when inputs are increased by
some percentage and output increases by
an equal percentage, causing unit costs to
remain constant.
Consumer Equilibrium The equilibrium
that occurs when the consumer has spent all
income and the marginal utilities per dollar
spent on each good purchased are equal:
MU
A/PA 5 MUB/PB 5 ??? 5 MUZ /PZ,
where the letters A–Z represent all the goods
a person buys.
Consumer Price Index (CPI) The
weighted average of prices of a specific set
of goods and services purchased by a typical
household; a widely cited index number for
the price level.
Consumers’ Surplus (CS) The difference between the maximum price a buyer is
willing and able to pay for a good or service
and the price actually paid. CS 5 Maximum
buying price 2 Price paid.
Consumption The sum of spending on
durable goods, nondurable goods, and
services.
Consumption Function The relationship between consumption and disposable
income. In the consumption function used
in this text, consumption is directly related to
disposable income and is positive even at zero
disposable income: C 5 C0 1 (MPC)(Yd).