micro ch3

Flashcards defining core vocabulary terms from the transcript on competitive markets, supply, demand, shifts vs. movements, and equilibrium conditions.

Market

A place or situation where buyers and sellers interact to exchange a good or service.

Competitive Market

A market with many buyers and many sellers of the same good or service, where no single buyer or seller can noticeably affect the market price.

Noncompetitive Market

A market with relatively few major sellers, where an individual firm's actions can affect the price.

Supply

How much sellers are willing to sell at different prices.

Law of Supply

The relationship where a higher price leads to a higher quantity supplied, and a lower price leads to a lower quantity supplied.

Supply Schedule

A table showing how much sellers are willing to provide at different prices.

Supply Curve

A graph showing the relationship between price on the vertical axis and quantity supplied on the horizontal axis, which normally slopes upward.

Change in Quantity Supplied

A movement along the supply curve caused by a change in the good's own price.

Change in Supply

A shift of the entire supply curve caused by a factor other than the good's own price.

Input

Something used to produce a good or service, such as gas, labor, or raw materials.

Substitutes in Production

Alternate goods or services that sellers can produce instead of the original product.

Complements in Production

Products that are naturally produced together, where higher production of one can increase production of the other.

Market Supply

The horizontal sum of all individual sellers' supply curves.

Demand

How much consumers are willing to buy at different prices.

Law of Demand

The relationship where a higher price leads to a lower quantity demanded, and a lower price leads to a higher quantity demanded.

Demand Schedule

A table showing how much consumers want to buy at different prices.

Demand Curve

A graph showing the relationship between price on the vertical axis and quantity demanded on the horizontal axis, which normally slopes downward.

Change in Quantity Demanded

A movement along the demand curve caused by a change in the good's own price.

Change in Demand

A shift of the entire demand curve caused by a factor other than the good's own price.

Substitutes

Goods that can be used instead of each other, where an increase in the price of one leads to an increase in demand for the other.

Complements

Goods that are consumed together, where an increase in the price of one leads to a decrease in demand for the other.

Normal Good

A good for which demand increases when consumer income increases.

Inferior Good

A good for which demand decreases when consumer income increases.

Market Demand

The horizontal sum of all individual buyers' demand curves.

Market Equilibrium

The point where quantity demanded equals quantity supplied, occurring at the intersection of the demand curve and supply curve.

Market-Clearing Price

The price where quantity demanded equals quantity supplied, leaving no surplus and no shortage.

Surplus

A situation where quantity supplied is greater than quantity demanded, typically occurring when the price is above equilibrium.

Shortage

A situation where quantity demanded is greater than quantity supplied, typically occurring when the price is below equilibrium.