chapter 4 Flashcards
market
group of buyers and sellers of a particular good or service
competitive market
a market in which there are many buyers and sellers that each has a negligible impact on the market price.
monopoly
one or few sellers
quantity demanded
the amount of good that buyers are willing and able to purchase
law of demand
when the price of a good rises, the quantity demanded of the good falls
demand schedule
table that shows the relationship between the price of a good and the quantity demanded
market demand
the sum of all the individual demands for a particular good or service
normal good
demand for good falls when income falls. demand for good increases when income increases
inferior good
demand for good falls when income increases.
quantity supplied
amount that sellers are willing and able to sell
law of supply
quantity supplied of a good rises when the price of the good rises
supply schedule
table that shows the relationship between the price of a good and the quantity supplied
variables that affect supply curve
input prices, technology, expectations, number of sellers
equilibrium
market price has reached the point in which quantity demanded equals quantity supplied
equilibrium price (market clearing price)
the price that balances quantity demanded and quantity supplied
