ECN 104 Lecture Notes - Lecture 4: Economic Equilibrium, Normal Good, Inferior Good
Document Summary
Markets is any arrangement that enables buyers and sellers to get information and business. The supply and demand model is how a competitive market behaves. Competitive market is a market in which there are many buyers and sellers of the same goods and service, none of whom can influence the price at which the good and services sold. Quantity demanded is the actual amount of goods or services consumers are willing and able to buy at a specific price point. Law of demand other things equal, as price falls the quantity demanded rises, and as price rises the quantity demanded falls. Diminishing marginal utility as a consumer increase the consumption of a good or service, the marginal utility obtained from each additional unit decreases. Income effect indi(cid:272)ates that a lower pri(cid:272)e in(cid:272)reases the pur(cid:272)hasing power of a (cid:271)uyer"s money income.
