Ap Flashcards
is an economic institution that coordinates the production and consumption of goods and services
market
who expresses his or her desire and willingness to purchase goods and services
consumer
helps the consumer attain his or her various needs and wants by producing the goods
firm
govern economics transaction
market institutions or the rules of the game
Who introduces this idea?
Douglass North
NFA meaning
National Food Authority
DTI meaning
department of trade and industry
LTFRB meaning
Land transportation franchise and regulatory board
means that both sellers and buyers are plentiful and accordingly they are too small to affect the market price of the community
smallness of both buyers and sellers in relation to the market
implies that both consumer and supplier are ?
price takers
no perceived distinct difference among the products and all the products being sold in the market are the same
homogenous product
in a perfectly competitive market the forces of supply and demand can freely work to determine the equilibrium price and quantity
Absence of artificial restraints or controls
fourth feature assumes free entry and exit of goods and resources both in the geographical and business sense
perfect mobility of goods and resources
consumers and produces have absolute knowledge of what commodities are for sale where they are being sold and at what price
Perfect information
five features imply that the firm operating in a perfectly competitive market faces a
perfectly elastic or horizontal demand curve
