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Sept 22 note - What affects your decision to go to the movies.docx

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Hannah Holmes

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What affects your decision to go to the movies Ch 422092008The price in the market is called the invisible handInvisible HandNatural force that guides free market capitalism through competition for scarce resources in a free market each participant will try to maximize selfinterest and the interaction of market participants leading to exchange of goods and services enables each participant to be better off than when simply producing for himselfherselfBuyerIf your buyer value is too low lower than the equilibrium price you will be wise not to buy anything The buyer value too low may be because that the buyer does not place a high value on the bookSellerIf you seller value is too high higher than the equilibrium price you will be wise not to sell anything The seller value too high may be cause by the production cost being too highFinancial market depend on confidentIe stock marketWhen people have confident in the stock they will buy thus raising the stock value viceversa if people does not have confident in the stock they will sell thus decreasing the stock valueMarketgroup of buyers and sellersThere are 4 types of market structure1Perfect competitionLot of buyers and selling who is using identical product2MonopolyOnly one sellerIe Local Cable Company the diamond companyBarriershuge structure government the land3Oligopoly OPACFew sellers coming together to try to act as a MonopolyThey try to maximize profit by adjusting price1
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