Ch 4 Supply and Demand

Ch 4 Supply and Demand - Chapter 4: The Market Forces of...

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Chapter 4: The Market Forces of Supply and Demand Supply and demand are the two words economist use most often Determines the price of each produced and price at which is sold What is a Market? Market: a group of buyers and sellers of a particular service or good Organized markets are where buyers and sellers meet at a specific time and place Markets are often less organized What is Competition? Competitive Market: a market in which there are many buyers and many sellers so that each has a negligible impact on the market price The goods offered for sale are all exactly the same The buyers and sellers are so numerous that no single buyer or seller has any influence over the market price When a market has one seller, they set the price – monopoly Perfectly competitive markets are the easiest to analyze Everyone participates in the market takes the price as given by market conditions Demand Quantity demanded: the amount of a good that buyers are willing and able to purchase Laws of demand: the claim that other things equal, the quantity demanded of good falls when the price of the good rises (P Q , P Q ) Demand Schedule: a table that shows the relationship between the price of good and the quantity
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This note was uploaded on 01/08/2012 for the course EC 101 taught by Professor Idson during the Fall '08 term at BU.

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Ch 4 Supply and Demand - Chapter 4: The Market Forces of...

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