Intro - Intro: Markets ECON 3381.01 A. Hales What is a...

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Intro: Markets ECON 3381.01 A. Hales
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What is a market? Any arrangement that enables buyers and sellers to do business with each other In a market with no government intervention, there are only 2 groups: Producers: the sellers of goods and services Consumers: the buyers of goods and services
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Demand The Law of Demand states there is an inverse relationship between the price of a good and the quantity demanded of that good. In other words: when the price of a good increases, the quantity that consumers are willing and able to buy decreases and when the price of a good decreases, the quantity that consumers are willing and able to buy increases.
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Changes in Quantity Demanded versus Changes in Demand A change in quantity demanded indicates a response of consumers to a change in the price of a good. This is shown as a movement ALONG the demand curve. For example, if the price of a Coke changes from $1 to $10, the quantity demanded of coke will fall. A change in demand indicates a response of consumers
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Intro - Intro: Markets ECON 3381.01 A. Hales What is a...

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