ECON 105 Lecture Notes - Lecture 4: Cowhide, Final Good, Economic Equilibrium

• School: Simon Fraser University
• Department: Economics
• Course: ECON 105
• Professor: Junjie Liu

Document Summary

Week 3: market forces of supply and demand. A market is a group of buyers and sellers of a particular good or service. This chapter focuses on the competitive market: perfect competition. 5 key elements in this model: demand curve. The law of demand states that other things equal, the quantity demanded of a good falls when the price of the good rises. The quantity demanded is the amount of good that buyers are willing to buy at a given price. Demand schedule: a table that shows the relationship between the price of a good and the quantity demanded. Increase in demand: any change that increases the quantity demanded at each level of price. Decrease in demand: any change that decreases quantity demanded at each given price. When income increases, a normal good increases in demand. When income increases, an inferior good decreases in demand: prices of related goods and services.