Lecture Notes 9-17-09 Chapter 4

Lecture Notes 9-17-09 Chapter 4 - Competitive Market: One...

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Competitive Market: One with many buyers and sellers, each has a negligible effect on price. Perfectly Competitive Market: All goods exactly the same (“homogenous”) Buyers and sellers so numerous that no one can affect market price–each is a “price taker” Demand Quantity Demanded: The amount of the good that buyers are willing and able to purchase “Law” of Demand: The claim that the quantity demanded of a good falls when the price of the good rises, other things equal Demand Schedule: A table that shows the relationship between the price of a good and the quantity demanded Market Demand versus Individual Demand The quantity demanded in the market is the sum of the quantities demanded by all buyers at each price Suppose Helen and Ken are the only two buyers in the Latte Market Demand Curve Shifters Demand curve shows how price affects quantity demanded, other things being equal “Other things” are non-price determinants of demand (ie. Things that determine buyers’ demand for a good other than the good’s price)
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This note was uploaded on 01/25/2010 for the course ECONOMICS 220:102 taught by Professor Zhang during the Fall '09 term at Rutgers.

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Lecture Notes 9-17-09 Chapter 4 - Competitive Market: One...

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