Market
Any arrangement that brings consumers and producers together
Competitive Market
Produce and sell a similar good
Producer / Seller aren’t powerful enough to affect the market price
1/15
Looks like no tags are added yet.
Name | Mastery | Learn | Test | Matching | Spaced |
---|
No study sessions yet.
Market
Any arrangement that brings consumers and producers together
Competitive Market
Produce and sell a similar good
Producer / Seller aren’t powerful enough to affect the market price
Demand
Good or service buyers are willing and able to
purchase at each price
Quantity Demanded
The total number of units of a good or service buyers are willing to purchase at a given price
Law of Demand
If price goes up = Demand goes down
If price goes down = Demand goes up
Movement along the demand curve means
Change in quantity demanded
Shift in the demand curve means
Change in demand
Normal Good
A good for which higher income causes an increase in demand
Inferior Good
A good for which higher income causes a decrease in demand
Supply
The amount of some good or service a seller is willing to supply at each price
Quantity Supplied
The total number of units of a good or service sellers are willing to sell at a given price
Law of Supply
If price goes up = Quantity Supplied goes up
If price goes down = Quantity Supplied goes down
Shortage
Occurs when Quantity Demanded > Quantity Supplied
Surplus
Occurs when Quantity Supplied > Quantity Demanded
Consumer Surplus
The gain from buying something at a price below the highest price you were willing to pay
Producer Surplus
The extra money a seller makes when they sell something for more than it cost them to produce it