Chapter 4 - Chapter 4 Thursday 12:20 PM Competitive market...

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C ompetitive market A market with many buyers and sellers trading identical products so that each buyer and seller is a price taker. complements Two goods for which an increase in the price of one leads to a decrease in the demand for the other. demand curve A graph of the relationship between the price of a good and the quantity demanded. demand schedule A table that shows the relationship between the price of a good and the quantity demanded. equilibrium A situation in which the market price has reached the level at which quantity supplied equals quantity demanded. equilibrium price The price that balances quantity supplied and quantity demanded. equilibrium quantity The quantity supplied and the quantity demanded at the equilibrium price. inferior good A good for which, other things equal, an increase in income leads to a decrease in demand. law of demand The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises. law of supply The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises. law of supply and demand
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This note was uploaded on 05/05/2011 for the course ECON 102 taught by Professor Yotsubo during the Spring '08 term at Rutgers.

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Chapter 4 - Chapter 4 Thursday 12:20 PM Competitive market...

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