Micro Ch 3

competitive market

has many buyers and sellers of the same good/service; none of whom can influence the price alone.

supply and demand model

model of how a competitive market behaves

5 key elements of supply and demand model

demand curve, supply curve, factors that shift the demand curve and factors that shift the supply curve, the market equilibrium, changes in the market equilibrium

supply schedule

shows how much of a good or service would be supplied at different prices

supply curve

shows quantity supplied at various prices

quantity supplied

quantity that producers are willing and able to sell at a particular price

factors that can shift the supply curve include changes in

Input prices, prices of related goods/services, technology, expectations, # of producers

rightward shift of supply curve means

increase in supply at any given price

leftward shift of supply curve means

a decrease in supply at any given price

increase in price of an input

makes production more costly; supply decreases