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| is a market in which there are many buyers and sellers of the smae good or service, none of whom can influence the price at which the good or service is sold. |
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| is a market model of how a competetive market works. |
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| shows how much of a good or service consumers will want to buy at different prices. |
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Definition
| is the actual amount of a good or service consumers are willing to buy at some specific price. |
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| is a graphical representation of the demand schedule. It shows the relationship bwtween quantity demanded and the price. |
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| says that a hight price for a good or service, other things equal, leads people to demand a smaller quantity of the good or service. |
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| A shift of the demand curve |
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Definition
| is a change in the quantity demanded at any given price, represented by the change of the original demand curve to a new position, denoted by a new demand curve. |
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| movments along the demand curve |
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Definition
| is a change in the quantity demeanded of a good that is the result of a change in that good's price. |
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| Two goods are substitutes if a rise in the price of one of teh goods leads to an increase in the demand for the other good. |
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| Two goods are compliments if a rise in the price of one good leads to a decrease in the demand for the other good. |
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| 5 things that will shift the demand curve |
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Definition
1) changes in the price of related goods and services
2) changes in Income
3) changes in taste
4) changes in expectations
5) Changes in number of consumers |
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| when a rise in income increases the demand for a good-the normal case- it is a normal good. |
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| When a rise in income decreasese the demand for a good, it it an inferior good. |
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| illustrates the relationship between quantity demanded and the price for an individual consumer. |
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Definition
| is the actual amount of a good or service producers are willing to sell at some specific price. |
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| shows how much of a good or service producers wil supply at different prices |
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| shows the relationship between quantitiy supplied and price. |
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Term
| shift of the supply curve |
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Definition
| is a change in the quantity supplied of a good or service at any given price. It is represented by the change of the original supply curve to a new position denoted by a new supply curve. |
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| Movements along the supply curve |
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Definition
| A movment along the supply curve is a change in the quantity supplied of a good that is the result of a change in that good's price. |
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Definition
| is a good or service that is used to priduce another good or service. |
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Definition
| illustatres the relationship between quantity supplied and price for an individual producer. |
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Definition
| A competetive market is in the equilibrium when price has moved to a level at which the quantity of a good or service demanded equals the quantity of that good or service supplied. The price at which this takes place is the equilibrium price, also resferred to as the market-clearing price. |
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Definition
| THE quantity of the good or service is the equilibrium quantity. |
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| There is a surplus of a good or service when the quantity supplied exceeds the quantity demanded. Surpluses accur when the price is above its equilibrium level. |
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| THere is a shortage of a good or service when the quantity demanded exceeds the quantity supplied. Shortages occur when the price is below its equilibrium level. |
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