Term
| The supply and demand model assumes |
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Definition
| a perfectly competitive market. |
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Term
| A perfectly competitive market is... |
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Definition
a market that meets the conditions:
I. Many buyers and sellers are present.
II. All products sold are identical.
III. There are no barriers to new firms entering the market. |
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Term
| The main factor in consumer decisions |
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Definition
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Definition
| What a customer is both WILLING and ABLE to buy. |
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Definition
| tables that show the relationship between PRICE and the QUANTITY DEMANDED of a product. |
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Definition
| The plotted points on a demand schedule that shows the relationship between the price of a product and the quantity of the product demanded. |
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Term
| Quantity demanded is defined as... |
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Definition
| The amount of goods or services that a customer is WILLING and ABLE to buy at a given price. |
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Term
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Definition
A demand curve shows this "demand by ALL customers of a given good or service."
Dependant upon where the product is sold (e.g. local "_______" for a town-based restaurant). |
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Term
| The price of a product and the quantity demanded have what type of relationship? |
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Definition
The price of a product and the quantity demanded have an inverse relationship.
As the price of a product goes down, the quantity demanded for the product goes up. |
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Term
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Definition
The rule that, holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and the when the price of a product rises, the quantity demanded of the product will decreases.
Inverse relationship! |
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Definition
| The change in the quantity demanded of some product that results from a CHANGE IN PRICE, making the good MORE or LESS expensive relative to other goods that are substitutes. |
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Definition
| The change in the quantity demanded of a product DUE to the effect of change in the good's price ON consumers' purchasing power. |
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Definition
| The quantity of goods a consumer can buy with a fixed amount of income. |
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Term
| Product price/Purchasing Power/Quantity Demanded relationship |
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Definition
As product prices increases, purchasing power decreases, and quantity demanded decreases.
As product price decreases, purchasing power increases, and quantity demanded increases. |
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Term
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Definition
| Latin for "all else equal". The requirement that when analyzing the relationship between two variables--such as price and quantity demanded--other variables must be held constant. |
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Term
| A shift in a demand curve is... |
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Definition
| an increase or decrease in DEMAND itself. |
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Term
| A movement along a demand curve |
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Definition
| is an increase or decrease in the QUANTITY DEMANDED. |
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