Ss_W02-3_T02_lecture(R)(1in1) - Reading Assignment Chapter 4 Indicative contents 1 Demand and The Law of Demand 2 Supply and The Law of Supply 3 Market

Ss_W02-3_T02_lecture(R)(1in1) - Reading Assignment Chapter...

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1 Reading Assignment: Chapter 4 Indicative contents 1. Demand and The Law of Demand. 2. Supply and The Law of Supply. 3. Market Equilibrium After studying this topic, you will be able to: 1. Distinguish between quantity demanded and demand, and explain what determines demand. 2. Distinguish between quantity supplied and supply, and explain what determines supply. 3. Understand the nature of Equilibrium. 4. Explain how demand and supply determine equilibrium price and quantity in a market, and explain the effects of changes in demand and supply.
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2 COMPETITIVE MARKETS A market is any arrangement that brings buyers and sellers together. A market might be a physical place or a group of buyers and sellers spread around the world who never meet. In this chapter, we study a competitive marketthat has so many buyers and sellers; no individual buyer or seller can influence the price; goods are the same; all market players are well-informed. P.84
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3 Quantity Demand and The Law of Demand Quantity demanded is the amount of a good, service, or resource that people are willing and able to buy during a specified period at a specified price. The quantity demanded is an amount per unit of time. For example, the amount per day or per month. The Law of Demand Other things remaining the same, If the price of the good rises, the quantity demanded of that good decreases. If the price of the good falls, the quantity demanded of that good increases. OR When the price of the good rises, the quantity demanded of that good decreases, vice versa, holding other things constant. P.85
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4 Demand, Demand Schedule, and Curve Demandcomes from the behavior of buyers. It is a plan of purchase. It reflects the relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same.Demand is illustrated by a demand schedule and a demand curve. Demand schedule is a list (table) of the quantities demanded at each different price when all the other factors on buying plans remain the same.Demand curve is a graph of the relationship between the quantity demanded of a good and its price when all other influences on buying plans remain the same.P.85-86
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5 Demand Curve Figure 4.1 Demand Schedule and Demand Curve P.86
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6 Individual Demand and Market Demand Market demandis the sum of the demands of all the buyers in a market. The market demand curve is the horizontal sum of the demand curves of all buyers in the market. Figure 4.2 Individual Demand and Market Demand P.87
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