Demand2 - Demand Demand refers to the amount of goods and...

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Demand Terms Aggregate Demand - The combined demand of all buyers in a market. Budget Constraint - The outermost boundary of possible purchase combinations that a person can make, given how much money they have and the price of the goods in consideration. Buyer - Someone who purchases goods and services from a seller for money. Competition - In a market economy, competition occurs between large numbers of buyers and sellers who vie for the opportunity to buy or sell goods and services. The competition among buyers means that prices will never fall very low, and the competition among sellers means that prices will never rise very high. This is only true if there are so many buyers and sellers that no one individual has a significant impact on the market's equilibrium. Complementary Good - A good is called a complementary good if the demand for the good increases with demand for another good. One extreme example: right shoes are complementary goods for left shoes.
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Unformatted text preview: Demand - Demand refers to the amount of goods and services that buyers are willing to purchase. Typically, demand decreases with increases in price, this trend can be graphically represented with a demand curve. Demand can be affected by changes in income, changes in price, and changes in relative price. Demand Curve - A demand curve is the graphical representation of the relationship between quantities of goods and services that buyers are willing to purchase and the price of those goods and services. Example: A Sample Demand Curve Diminishing Returns - Concept that the marginal utility derived from acquiring successive identical goods decreases with increasing quantities of goods. Economics - Economics is the study of the production and distribution of scarce resources, and goods and services. Equilibrium Price - The price of a good or service at which quantity supplied is equal to quantity demanded. Also called the market-clearing price....
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