Chapter notes for chapter 3

Chapter notes for chapter 3 - Chapter notes for chapter 3...

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Chapter notes for chapter 3 Supply and Demand: a model of a competitive market Competitive market- a marjet in which there are many buyers and sellers of the same good or service. Supply and demand model- best method for charting a competitive market there are 5 elements to it, the demand curve, the supply curve, the set of factors that cause the demand and supply curves to shift, the equilibrium price, the way the equilibrium price changes when the demand curve shifts. The demand curve A demand schedule is a table showing how much of a good or service consumers will want to buy at different prices. a demand curve is a visual representation of a demand schedule the law of demand states that the higher the cost of a good the less people will be willing to pay for it shifts of the demand curve occur when the entire curve moves, movements along the demand curve occur when there is a change is price corresponding to a number wof people who would but the good at that price when an economist says that demand increased or decreased they mean the curve shifted not that there wsa movement along the curve rightward shifts of the demand curve correspond to an increase in demand leftward shifts
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