Chapter 4 - Notes

Chapter 4 - Notes - Chapter 4 Notes Perfectly competitive...

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Chapter 4 Notes Perfectly competitive market – has a very large numbers of firms, each of which produces the same standardized product in amounts so small that no individual firm can affect the market price. An example of a perfectly competitive firm is a wheat farmer, who produces a tiny fraction of the total supply of wheat, no matter how much wheat he produces the farmer can’t change the market price of wheat. Quantity demanded – the amount of the product consumers are willing to buy Demand schedule – the starting point for a discussion of individual demand. Demand schedule is a table of numbers showing the relationships between the price of a particular product and the quantity that an individual consumer is willing to buy. Individual demand curve – is a graphical representation of the demand schedule. The demand curve shows the relationship between the price and the quantity demanded by an individual consumer. ** The word ceretis paribus reminds us to isolate the relationship between price and quanitity demanded, we must assume that income, other prices, and tastes are
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Chapter 4 - Notes - Chapter 4 Notes Perfectly competitive...

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