Supply and Demand

Globalization

________- a process by which the economies of the world become more integrated by the free flow across national boundaries of goods, investment, finances, and labor.

Competitive Market

________: has many buyers and sellers of the same goods and services, none of whom can influence the price.

A→B price decrease

________ leads to increase in quantity demanded.

B→ a price increase

________ leads to decreases in quantity demanded.

Competitive Market

has many buyers and sellers of the same goods and services, none of whom can influence the price

Supply

the quantity of a good and/or service that producers are willing and able to offer for sale at each possible price during a certain time period

Globalization

a process by which the economies of the world become more integrated by the free flow across national boundaries of goods, investment, finances, and labor

Demand

the quantity of a good or service that buyers are willing to and able to buy at all possible prices during a certain time period

Law of demand

as the price of a good increases, the quantity demand of that good decreases

Normal good

demand increases when income increases

Inferior good

demand decreases when income increases

Substitute

two goods are substitutes, a decrease in the price of one leads to a decrease in demand for another

complements

two goods are complements a decrease in the price of one good leads to an increase in the demand for the other

Law of demand

as the price of a increases the quantity demanded of the that good decreases