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Definition
| a market in which there are many buyers and sellers of the same good or service |
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| a model of how competitive market works |
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| shows how much of a good or service consumers want to buy at different prices |
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| a graphical representation of the demand schedule. It shows how much of a good or service consumers want to buy at any given price |
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Definition
| the actual amount consumers are willing to buy at some specific price |
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| the higher the price of a good, other things equal, leads people to demand a smaller quantity of the good |
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| shift of the demand curve |
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Definition
| 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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| movement along the demand curve |
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Definition
| a change in the quantity demanded of a good that is the result of a change in that good's price |
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Definition
| two goods are substitutes if a fall in the price of one of the goods makes consumers less willing to buy the other good |
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| two goods are complements if a fall in the price of one good makes people more willing to buy the other good |
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Definition
| when a rise in income increases the demand of a good- the normal case- the good is a normal good |
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Definition
| when a rise in income decreases the demand for a good, it is an inferior good |
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Definition
| the actual amount of a good or serice people are willing to sell at some specific price |
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Definition
| shows how much of a good or service would be supplied at different prices |
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Definition
| shows graphically how much of a good or service people are willing to sell at any given price |
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Term
| shift of the supply curve |
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Definition
| a change of 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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Term
| movement along the supply curve |
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Definition
| 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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| a good that is used to produce another good |
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Term
equilibrium price aka market-clearing price |
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Definition
| a competitive market is in equilibrium when price has moved to a new level at which the quantity demanded of a good equals the quantity supplied of that good. |
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Definition
| the quantity of the good bought and sold at the equilibrium price |
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Definition
| when the quantity supplied exceeds the quantity demanded. Surpluses occur when the price is above the equilibrium level |
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Definition
| there is a shortage of a good when the quantity demanded exceeds the quantity supplied. Shortages occur when the price is below the equilibrium level. |
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