ECON 1BB3 Lecture Notes - Lecture 4: Demand Curve, Takers

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Chapter 4: the market forces of supply a(cid:374)d de(cid:373)a(cid:374)d. The behaviour of people when they interact in markets. A group of buyers and sellers of a particular good or service: buyers determine the demand, sellers determine the supply. A market where there are a huge amount of buyers and sellers: no single buyer or seller has any influence on the market price. Assume markets are perfectly competitive: sells the same goods, many buyers and sellers. Buyers and sellers in these markets are price takers: they accept the price that the market determines. A market where there is only one seller: the seller sets the price. The amount of a good that buyers are willing and able to buy: low price leads to high demand. Price and quantity demanded are negatively related: when price goes up, quantity demanded goes down, when price goes down, quantity demanded goes up.