Demand and Supply + demand and supply curves + effects on those curves + complements + substitutes + inferior & normal goods + law of demand & law of supply + perfectly competitive market
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demand and supply
market: a group of buyers and sellers of a particular product
competitive market: one with many buyers and sellers, each has a negligible
effect on price
perfectly competitive market: goods sold in a market are all identical; buyers and
sellers so numerous that no one can affect the market price=each is a price taker
(price is given to them, doesn’t influence the market price)
we assume markets are perfectly competitive.
demand:
quantity demanded (Qd): of any goods is the amount of the good that buyers
are willing and able to purchase
amount you’re buying depends on its own price (inverse relationship)
if the price of a good increases→decrease the quantity demanded
if the price of a good decreases→increase the quantity demanded
law of demand: the claim that the quantity demanded of a good falls when
the price of the good rises, other things equal
demand schedule: a table that. shows the relationship between the price of a
good and the quantity demanded
price is y
quantity is x
quantity demanded is a single point on the curve
demand is the slope of the demand schedule curve
quantity market demand:
added up all the quantities demanded from each individual at each price
demand and supply 1
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