4 Econ Class notes - Know determinants, effect, etc. Lots...

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Know determinants, effect, etc. Lots of comparative statics Market forces of Supply and Demand-Learn Determinants, whether they are supply or demand, learn affects I. Markets and Competition a. Markets i. A group of buyers and sellers of a particular good or service b. competition i. The market in which there are so many buyers and so many sellers that neither has an influence on the price c. perfectly competitive markets i. infinite buyers ii. infinite sellers iii. Characteristics (assumptions) 1. goods for sale are exactly the same-homogeneity 2. no seller or buyer has any influence on the price a. they are price takers-take the price as given, no haggling b. an individuals behavior does not affect price, price affects an individuals behavior II. Demand a. Demand Curve-Captures the relationships between price and quantity demanded i. Quantity demanded-the amount of a good purchased given price ii. The demand curve is inversely related to price iii. Increase in price yields a decrease in QD 1. Scan in graph on back of econ syllabus iv. Pricing b. Law of demand ii. Claim that, other things equal, Increase in Price results in decrease in QD iii. Decrease in price, increase in QD iv. Demand schedule i. A table that captures the relationship between price and QD
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4 Econ Class notes - Know determinants, effect, etc. Lots...

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