chapter 4 all

chapter 4 all - Chapter 4 Supply and Demand...

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Chapter 4 Supply and Demand THE MARKET FORCES OF SUPPLY AND DEMAND 2 Markets and Competition A market is a group of buyers and sellers of a particular product. A competitive market is one with many buyers and sellers, each has a negligible effect on price. In a perfectly competitive market: All goods exactly the same Buyers & sellers so numerous that no one can affect market price – each is a “ price taker In this chapter, we assume markets are perfectly competitive. Is this a realistic assumption?
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Demand (of goods and services) Who is demanding the good? How does demand differ from a want? Quantity Demand: QD The amount people are willing to buy at a specific price Ceteris Paribus .(_____________________________________ ) Demand Schedule: Shows QD at different prices. Price Quantity Demanded Law of Demand: As price falls Quantity Demanded_______. Price and QD are ______________ related. Demand curve : shows the graphical relationship between price(P) and quantity demanded (QD).
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Real World Examples Investors Snapping Up Downtown Miami Condos Are the good 'old days of real estate back? It appears so in Downtown Miami. In recent weeks developers have sold hundreds of condos, in a flurry of activity  they haven't seen since the peak of the housing market. Some builders are  actually running out of inventory. The first building to sell out, Brickell on the  River, happened quietly and quickly selling 120 units in just six weeks time. "It's pretty impressive when you walk into a sales office and you have 20-30  people waiting to see units. Sounds crazy but it's actually happening now," said  Andres Asion of Miami Real Estate Group. Before Asion could deposit the checks,  he had sold out the entire building; something developers in this area have not  been able to do for the past three years.  So how did Asion do it? Price. They dropped it roughly a $100 thousand under their closest competition. The  final prices were half of what units sold for at the peak of the market. 2.  Manhattan Hotels Fill Rooms With Low Rates       Hotels in Manhattan also lost business in the financial crisis. But in April, rooms  began filling up, sending the occupancy rate back over 80%. In July, 83.3% of the  rooms were filled, a 5.6% decline since last year but still the highest occupancy  rate in the nation, preliminary Smith Travel data shows. But to attract business, Manhattan hotel operators have slashed room rates by  nearly one-third since last year, to an average of just under $200 a night. “I  know I could come across sounding like the convention bureau, but New York  really is a good buy right now,” said John A. Fox, a senior vice president at the  New York offices of PKF Consulting, a national research and hotel advisory firm.
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chapter 4 all - Chapter 4 Supply and Demand...

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