Microeconomics: Chapter 4

The Market Forces Of Supply And Demand

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Side ASide B
Define a market.
A group of buyers and sellers of a particular good or service.
What is a competative market?
One in which there are so many buyers and so many sellers that each ahs a negligable impact on the market price.
What is the law of demand?
The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises.
Define quantity demanded. How does it differe from a change in demand?
The amount of  the good that buyers are willing and able to sell. Quantity demanded is brought about exclusively by a change in price. Change in demand is when the whole demand...
Name at least 3 demand curve shifters.
Changes in: -The number of buyers -Income -Prices of related goods -Tastes or preferences  -Expectations
Name at least 3 influences on supply.
-Price of the good -Prices of resources needed to produce it -Prices of related goods produced -Expected future prices -Number of suppliers -Technology
If the price of a good or service increases then the quantity supplied will: A) Increase B) Decrease
A- Increase *Increase in price is an incentive to increase production
Define equilibrium
When price has reached the level where quantity supplied is equal to quantity demanded.
When is there a surplus?
When quantity supplied is greater than quantity demanded.

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