Comptetitive Markets - Competitive Markets 1. Competitive...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Competitive Markets 1. Competitive Markets. 2. Market supply and demand. 3. Quantities supplied, demanded, and traded. 4. Adjustment to equilibrium. Competitive Markets A competitive market is one in which: (1) Sellers provide identical goods and buyers are so well-informed that they always find the lowest available price. (2) Each buyer and seller is a small part of the whole market. => There is just one price (the market price) and each single buyer or seller is too small to affect it. For now, we will assume that the buyers are consumers and the sellers are firms. Market Supply and Demand The market supply curve is the sum of the supply curves of the individual suppliers. It shows the total quantity supplied at each price. In a competitive market: The market demand curve is the sum of the demand curves of the individual demanders. It shows the total quantity demanded at each price. Quantity Supplied and Demanded
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Comptetitive Markets - Competitive Markets 1. Competitive...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online