Chalter 4 Flashcards
Market
A group of buyers and sellers of a particular good or service
Competitive market
Market with lots of buyers and sellers so that each has a negligible impact on the market price
Monopoly
Only 1 seller in the market and this seller sets the price
Quantity demanded
The amount of a good that buyers are willing and able to purchase (would have bought if available)
Law of demand
(Other things equal) the quantity demanded of a good falls when the price of the good rises
Ceteris paribus
Holding everything else constant
Normal good
When income goes up, demand goes up
Inferior good
When income goes up, demand goes down
Substitutes
When price of one item goes up, the demand of the ______ goes up as well.
Complements
When the price of one item goes up, then demand of the _____ goes down
What is the only change that prompts a movement along the curve?
Price change
Quantity supplied
The amount of a good that sellers are willing and able to sell
Law of supply
The claim that, other things equal, the quantity supplied of a good rises when the price of a good rises
