Term
| perfectly competitive market |
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Definition
many buyers and sellers, all products the same, no barriers for new firms
(only possible for wheat, etc) |
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Term
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Definition
| table showing relationship between price of product and quantity demanded |
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Term
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Definition
| amount of a good or service that a customer is willing and able to pay |
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Term
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Definition
| shows the relationship between proce of product and quantity demanded |
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Term
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Definition
the inverse relationship between the price of a product and quantity demanded
- heec; when the price falls, the demand increases and vv. |
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Term
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Definition
| changein the quanitity demanded results from change in price making it cheaper than other goods that are substitutes |
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Term
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Definition
effect of a change in good's price on consumer's purchasing power
(purchasing power = what you can buy on your fixed income) |
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Term
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Definition
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Term
| variables that shift market demand |
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Definition
1. income
2. price of related goods
3. taste
4. pop/demo
5. expected future price |
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Term
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Definition
| demand increases following a rise in income and vv |
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Term
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Definition
demand decreases during rise in income and vv
*tuna vs steak |
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Term
| complementary goods vs substitute goods |
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Definition
complementary goods: buns/ burgers
substitute: buy one and less of another |
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Term
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Definition
| ad campaigns/ catchall category |
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Term
| change in demand vs change in quanitity demanded |
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Definition
change in demand: shift of curve (variable other than price)
change in QD: movement along curve due to price change |
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Term
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Definition
| amount a good or service that a firm is willing and able to supply at a given price |
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Term
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Definition
| shows rel. price of product and quantity supplied |
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Term
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Definition
| heec; increase in price causes increase in quantity supplied and vv |
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Term
| variables that shift supply |
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Definition
1. price of inputs
2. technological change
3. prices of substitutes in production
4. number of firms in market
5. expeted future prices |
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Term
| what happens when firms enter/exit the market |
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Definition
enter: shifts right
exit: shifts left |
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Term
| change in supply vs change in quantity supplied |
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Definition
change in supply: shift of curve not related to price
change in quantity supplied: movement on curve due to price change |
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Term
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Definition
| only at this point is quantity willing to buy equal to quantity willing to sell |
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Term
| how does a market not at equilibirum move toward equilibrium and then stay there |
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Definition
| shortage and surplus logical responses |
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Term
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Definition
when quanitity supplied is greater than demanded
- incentive to decrease price --> simultaneously increases demand and decreases supply |
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Term
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Definition
when quantity demanded is greater than quanitity supplied
- raise price w out losing sales ---> increases supply and decreases demand |
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Term
| how markets change over time |
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Definition
| depends on whether demand shifts more or if supply shifts more |
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