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o competitive market A market with many buyers and sellers trading identical products so that each buyer and seller is a price taker. o complements Two goods for which an increase in the price of one leads to a decrease in the demand for the other. o demand curve A graph of the relationship between the price of a good and the quantity demanded. o demand schedule A table that shows the relationship between the price of a good and the quantity demanded. o equilibrium A situation in which the market price has reached the level at which quantity supplied equals quantity demanded. o equilibrium price The price that balances quantity supplied and quantity demanded. o equilibrium quantity The quantity supplied and the quantity demanded at the equilibrium price. o inferior good A good for which, other things equal, an increase in income leads to a decrease in demand. o law of demand The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises. o law of supply The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises. o law of supply and demand The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance. o market A group of buyers and sellers of a particular good or service. o normal good A good for which, other things equal, an increase in income leads to an increase in demand. o quantity demanded The amount of a good that buyers are willing and able to purchase. o quantity supplied The amount of a good that sellers are willing and able to sell. o shortage A situation in which quantity demanded is greater than quantity supplied. o substitutes Two goods for which an increase in the price of one leads to an increase in the demand for the other. o supply curve A graph of the relationship between the price of a good and the quantity supplied. o supply schedule A table that shows the relationship between the price of a good and the quantity supplied. o surplus A situation in which quantity supplied is greater than quantity demanded. The Market Forces of Supply and Demand Chapter Recap: Questions for Review 1. What is a competitive market? Briefly describe a type of market that is not perfectly competitive. ... View Full Document

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