Chapter 4 Notes - Chapter 4 Notes Supply and demand are the forces that make market economies work They determine the quantity of each good produced and

Chapter 4 Notes - Chapter 4 Notes Supply and demand are the...

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Chapter 4 NotesSupply and demand are the forces that make market economies work. They determine the quantity of each good produced and the price at which it is sold. What is a market? 1) The goods offered for sale are all exactly the same 2) The buyers and sellers are so numerous that no single buyer or seller has any influence over the market price Price takers: buyers and sellers in perfectly competitive markets that must accept that price the market determines Monopoly: market that has only one seller EX: local cable television company, if residents of the town have only one company from which to buy cable service Demand Quantity demanded: the amount of a good that buyers are willing and able to purchase Law of Demand: the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises Demand schedule: a table that shows the relationship between the price of a good and the quantity demanded Demand curve: a graph of the relationship between the price of a good and the quantity demanded Market demand: the sum of all the individual demands for a particular good or service The market demand curve shows how the total quantity demanded of a good varies as the price
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