Chapter 4

Chapter 4 - Chapter 4.1 Market any arrangement that brings...

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Chapter 4.1 Market – any arrangement that brings buyers and sellers together There are markets for goods (apples), services (haircut), resources (computer programmers), and other manufactured inputs (auto parts). Also markets for money (stock exchange) Competitive market – one where there are so many buyers and sellers that no single buyer or seller can influence the price Quantity demanded – amount of any good, service, or resource that people are will and able to buy during a specified period at a specified price Example: when water is $1 per bottle, you decide to buy 2 bottles a day. 2 bottles a day is the quantity demanded It is measured as an amount per unit of time Law of demand – other things remaining the same, if the price of a good rises, the quantity demanded of that good decreases; and if the price of a good falls, the quantity demanded of that good increase Demand – relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same
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Chapter 4 - Chapter 4.1 Market any arrangement that brings...

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