3- Price determination in a competitive market.

Competing supply

When resources can be used to produce one good OR another good, not both

Competitive markets

A market with a large number of buyers and sellers, with low barriers to entry sand exit.

Complementary goods

Goods in joint demand; these goods are often bought together, eg printers and ink cartridges.

Composite demand

Demand for a multi-purpose good.

Condition of demand

A determinant of demand other than the good's price, that sets the position of the good's demand curve.

Condition of fupply

A determinant of supply other than the good's price, that sets the position of the good's supp;y curve.

Customer sovereignty

Consumers can collectively govern production in a market via exercising spending pwer. Strongest in perfectly competitive markets

Cross elasticity of demand (XED)

Measures the responsiveness of a good's demand to a change in the priceof a different good.

Demand

The quantity of a good or service that a consumer is willing and able to buy at a given price, at a given time.

Derived demand

Demand for a good that is the input of another good.

Disequilliibrium

Excess supply or demand in a market.

Effective demand

Desire for a good or servce that is backed by the ability to pay for said good or service.

Elasticity

Th proportionatie responsiveness of a second variable to a change in a first variable.

Equillibrium

No excess supply or demand in a market: a stateof balance between opposing forces.

Equillibrium price

The price where planned demand equals planned supply.

Excess demand

When consumers want to buy more than the producers are willing to sell; occurs below equillibrium price.

Excess supply

When producers want to sell more than consumers are willing to buy; occurs above equillibrium price.

Exchange

Trading objects of value, utilising media of exchange eg. money.

Income elasticity of demand (YED)

Measures the responsiveness of a good's demand to a change in the incomes on consumers.

Inferior good

A good for which demand rises as incomes fall.

Joint supply

When one good is produced, another good is also produced from the same raw materials.

Normal good

A good for which demand rises as incomes rise.

Price elasticity of supply

Measures the responsiveness of a good's supply to a change in price.

Producer sovereignty

Producers determine what is produced and the prices charged.

Substitute good

A good that is in competing demand; a good that can be used in the place of another similar good.

Supply

The quantity of a good or service that a producer is willing and able to sell at a given price, at a given time.