EC120 Lecture 4: EC 120 Day 4 (Chapter 4)
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EC120 Full Course Notes
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Week 3 the market forces of supply and demand. Supply and demand are the two words that make economists use most often. Supply and demand are the forces that make market economies work. They determine the quantity of each good produced and the price at which it is sold. If you want to know how any event or policy will affect the economy, you must think about how it will affect supply and demand. The terms of supply and demand refer to the behaviour of people as they iteract with one another in competitive markets. Before discussing how buyer and seller behave, let"s first consider what we mean by a market and competition. Demand + supply market equilibrium (p and q) Market a group of buyers and sellers of a particular good or service (doesn"t have to be a physical place)
