Term
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Definition
| a free market in which no buyer or seller has the power to significantly affect the prices at which goods are being exchanged. |
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Term
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Definition
| a market in which a single firm is the only seller in the market and which new sellers are barred from entering |
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Term
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Definition
| a market shared by a relatively small number of large firms that together can exercise some influence on prices. |
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Term
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Definition
| in a market, the point at which the quantity buyers want to buy equals the quanity sellers want to sell, and at which the highest price buyers are willing to pay equals the lowest price sellers are willing to take. |
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Term
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Definition
| a line on a graph indicating the QUANTITY of a product buyers would purchase at each PRICE at which it might be selling; the supply curve also can be understood as showing the highest price buyers on average would be willing to pay for a given amount of a product |
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Term
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Definition
| a line on graph indicating the QUANITY of a product sellers would privde for each PRICE at which it might be selling; the supply curve also can be understood as showing the price sellers must charge to cover the average costs of supplying a given amount of a product. |
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Term
| Principal of increasing marginal costs |
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Definition
| the principle that after a certain point, each additional unit a seller produces costs more to produce than earlier units. |
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Term
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Definition
• Supply and demand curves (these get tricky fast, and they’re hard to get comfortable interpreting, but we’ll spend a lot of time on these Tuesday)
o What do “price” and “quantity” represent on each of these?
HINT: They mean different things for supply vs: demand curve
Which curve constitutes “justice” for buyers? What about sellers?
o Know what a surplus and a shortage is in terms of supply/demand
o Know what a profit and a loss is in terms of supply/demand
• Know and understand the box on Equilibrium on page 204
• Monopoly markets
o One dominant seller controls all/most of market’s product
o Seller has power to set quantity/price of its products
o High entry barriers keep competitors from bringing more product to market
Do not spend time studying:
Principle of increasing marginal costs, Ethical weaknesses of monopolies |
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