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chapter 4 - o A table that shows the relationship between...

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Markets and Competition o A market is a group of buyers and sellers of a particular product. o A competitive market is one with many buyers and sellers, each has a negligible effect on price. o 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 Demand o The quantity demanded of any good is the amount of the good that buyers are willing and able to purchase. o Law of demand: the claim that the quantity demanded of a good falls when the price of the good rises, other things equal The Demand Schedule
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Unformatted text preview: o A table that shows the relationship between the price of a good and the quantity demanded. ⇒ Market Demand versus Individual demand o The quantity demanded in the market is the sum of the quantities demanded by all buyers at each price. ⇒ Demand Curve Shifters: o Increse in number of buyers. Increases demand at each price, shifts demand curve right. o Income: Demand for a normal good is positively related to income. • Increases in income causes increase in quantity demanded at each price, shifts D curve to the right....
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