M3 Flashcards
a process of buyers and sellers exchanging
goods and services.
MARKET
common example of markets:
financial market
farmers market
trade fair
over the counter
online market
auction
a group determine the demand
buyers
a group determine the supply of the product,
sellers
Types of Market Structure
Competitive
monopolistic
oligopoly
pure monopoly
market structure defined by a large number of small firms competing against each other. Products are identical to competitors’ products,
and there are no significant barriers to entering and exiting the market.
competitive / pure competition
Firms sell
similar but highly differentiated products.
monopolistic
dominated by a several firms, resulting in limited
competition. They can collaborate with or compete against each other to use their
collective market power to drive up prices and earn more profit.
oligopoly
there is only one firm or seller that dictates the
price and supply level of goods and services.
pure monopoly
other factors being constant price and
quantity demand of any good and service are inversely (negatively) related to each other.
law of demand
people will buy more at lower prices and buy less at higher prices, if other things remaining the same.
law of demand
shows the relationship between
the price of the commodity and the quantity demanded.
individual demand schedule
describes the demand for a given product and
who wants to purchase it. This is determined by how willing consumers are to spend a
certain price on a particular good or service.
market demand curve
the sum of
all individual demands for a particular good or service. The horizontal summing of the
demand curves of many individuals is called
market demand curve