chapter 4 Flashcards
who determines the demand in a market?
Buyers
who determines the supply?
sellers
what is a competitive market?
a market with many buyers and seller who have an impact on market price
what is a monoply?
there is only one seller who can determine the market price.
note: governments don’t like this because they cant control the price and said company has to much market power.
what is price taking?
it’s when there is so much of one good and service the price is determined by the seller
superstore controls the price of bananas because there is an abundance.
law of demand
there is a negative relationship, one goes up the other down and vice versa
quantity demanded?
the amount of a good buyers are willing and able to purchase
demand schedule ?
a table that shows the price of a good and quantity demanded.
demand curve?
a graph that shows the price of a good and quantity demanded.
what is a market demand?
the sum of all the individual
demands for a particular good or service
increase in demand-on-demand curve
right
decrease in demand, on demand curve?
left
normal good:
when someone makes more income they want to buy more.
ex. cars, clothes and tech
inferior good?
when someone make more, they want to buy less of a good.
Ex: Mcdonalds and bus tickets.
substitutes
if the price of on good goes up individuals will substitute for another.
ex: cars Toyota vs Honda
compliments:
the use of two goods together.
if printer price goes up, demand goes down and ink prices decrease.
the causes of shifts in demand curve?
taste
expectation
number of buyers or sellers
a change in price on the demand curve?
movement along the curve, neither in or out. we stay on the curve going up or down.
quantity supplied
the amount of a good sellers is willing to sell.
supply law
positively related.
can be displayed on a graph or table. if price rises, we want to supply more, if a price drops we want to supply less.
market supply
the sum of supplies of all sellers.
supply curve shifts
left, is a change that reduces quantity supplied. it’s called a decrease in supply
right, is a change the increases quantity supplied. its called a increase in supply.
the causes of shifts in a supply cure
input prices
technology
expectations
number of buyers
