STEN 1000 Lecture Notes - Lecture 5: Oligopoly, Perfect Competition, Monopolistic Competition
16 Aug 2019
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Document Summary
Three fundamental market composition principles: the law of supply and demand. The ability of the market to determine the price for which a product or service will be bought and sold: allowing private ownership, entrepreneurship, and wealth creation. Markets should be open to support, encourage and promote the concepts of private enterprise: extent of government in influencing economic activity and direction. Balance needs to exist between the three principles for an economic system to develop and grow. Supply and demand meet at a price equilibrium or a point at which there is no surplus or shortage of goods. Demand or the number of buyers willing to pay for a product or service at various price points: demand elasticity or the change in quantity demanded due to a change in price (i. e. electronic readers versus gasoline) Supply or how much of a product or service producers are willing to provide the market at various price points.
