Market
A group of buyers and sellers of a particular good or service
Buyers as a group
determine the demand for the product
sellers as a group
determine the supply of the product
Competitive Market
Classified according to their level of competition... its impossible for one individual to affect prices,
making the market competitive
Perfectly Competitive Market
All goods are the same, buyers and sellers are so numerous that no one can affect the market price, they
are "price takers"
Perfectly competitive markets have two characteristics
the goods and services bought and sold are exactly the same
there are so many buyers that a single one can affect the market price
True or False: The market for public utilities, like gas and electricity, does not exhibit the two primary
characteristics that define perfectly competitive markets.
True
True or False: The market for wheat does not exhibit the two primary characteristics that define
perfectly competitive markets.
False
Quantity Demanded
, Amount of a good that buyers are willing and able to purchase at a given price
Law of Demand
States that theres an INVERSE relationship between price and quantity demanded... basically as price
goes up, quantity demanded goes down
State the distinction between demand and quantity demanded
Demand is a relationship, quantity demanded is how much a person is willing and able to buy
Demand
The relationship between price and quantity demanded which tells us how much we're willing to buy
Demand Schedule
A table that shows the relationship between the price of a good and the quantity demanded
Market Demand
The sum of all individual demands for a good or service... basically the process of horizontally adding
Market Demand Curve
Sum the individual demand curves horizontally... to find the total quantity demanded at any price, we
add the individual quantities, in doing so we arrive at market quantity demanded
The Demand Curve
Shows how price affects quantity demanded, other things being equal
What are "other things" when talking about the demand curve
They are the non price determinants of demand... these are the things that determine buyers' demand
for a good, other than the good's price. These cause a SHIFT in the D curve
What is the difference between a shift and a movement?
A group of buyers and sellers of a particular good or service
Buyers as a group
determine the demand for the product
sellers as a group
determine the supply of the product
Competitive Market
Classified according to their level of competition... its impossible for one individual to affect prices,
making the market competitive
Perfectly Competitive Market
All goods are the same, buyers and sellers are so numerous that no one can affect the market price, they
are "price takers"
Perfectly competitive markets have two characteristics
the goods and services bought and sold are exactly the same
there are so many buyers that a single one can affect the market price
True or False: The market for public utilities, like gas and electricity, does not exhibit the two primary
characteristics that define perfectly competitive markets.
True
True or False: The market for wheat does not exhibit the two primary characteristics that define
perfectly competitive markets.
False
Quantity Demanded
, Amount of a good that buyers are willing and able to purchase at a given price
Law of Demand
States that theres an INVERSE relationship between price and quantity demanded... basically as price
goes up, quantity demanded goes down
State the distinction between demand and quantity demanded
Demand is a relationship, quantity demanded is how much a person is willing and able to buy
Demand
The relationship between price and quantity demanded which tells us how much we're willing to buy
Demand Schedule
A table that shows the relationship between the price of a good and the quantity demanded
Market Demand
The sum of all individual demands for a good or service... basically the process of horizontally adding
Market Demand Curve
Sum the individual demand curves horizontally... to find the total quantity demanded at any price, we
add the individual quantities, in doing so we arrive at market quantity demanded
The Demand Curve
Shows how price affects quantity demanded, other things being equal
What are "other things" when talking about the demand curve
They are the non price determinants of demand... these are the things that determine buyers' demand
for a good, other than the good's price. These cause a SHIFT in the D curve
What is the difference between a shift and a movement?
