Chapter 3: Supply + Demand Flashcards
1
Q
supply + demand model
A
explains how market prices are established + how those prices help allocate scarce resources
2
Q
Define market
A
group of buyers + sellers that interact in order to exchange + results in a price established for good being exchanges
3
Q
Characteristics of a competitive market
A
- many independent buyers + sellers
- no single buyer can influence the market price
- buyers + sellers trade a standardized good, all units have same features + quality
4
Q
Another name for buyers + sellers in competitive markets
A
price takers; can’t influence the market price
5
Q
Supply + Demand Model Steps
A
- Model Demand
- Model Supply
- Bring 2 sides together
6
Q
Quantity Demanded
A
the amount buyers are willing + able to purchase during a specific time
7
Q
3 ways to represent P + Qd
A
demand schedule
demand curve
demand function
8
Q
Quantity supplied
A
amount producers are willing + able to sell during a specific time
9
Q
A
10
Q
A
