ECON 2010 Lecture Notes - Lecture 7: Monopolistic Competition, Oligopoly, Demand Curve

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1 Oct 2015

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A competitive market is one in which a number of buyers and sellers are offering similar products and no single buyer or seller (or any small, collusive group) can influence the market price. Because most markets contain a large degree of competitiveness, the lessons of supply and demand can be apply to many different settings. According to the law of demand, the quantity of a good or service demanded varies inversely with its price, ceteris paribus. That is, other things equal, when the price of a good or service falls, the quantity demanded increases. Quantity of an item (in order) 6, 10, 15, 24. Price of that item (in order) , , , . Both the demand equation and the the quantity/price relationship require quantitative info. When people see a price go up, they tend to switch to other products or they buy less quantity of that product because it makes a buyer"s purchasing power weak.

Related Questions

1. In a competitive market, the quantity of a product produced and the price of the product are determined by

a. buyers.

b. sellers.

c. both buyers and sellers.

d. None of the above is correct.

2. Which of the following statements is correct?

a. Buyers determine supply and sellers determine demand.

b. Buyers determine demand and sellers determine supply.

c. Buyers determine both demand and supply

d. Sellers determine both demand and supply

3. The demand for a good or service is determined by

a. those who buy the good or service

b. the government.

c. those who sell the good or service.

d. both those who buy and those who sell the good or service.

4. An increase in supply is represented by

a. a movement downward and to the left along a supply curve.

b. a movement upward and to the right along a supply curve.

c. a rightward shift of a supply curve.

d. a leftward shift of a supply curve

ceruleanseal203

The market demand curve

a. slopes upward.

b. is found by vertically adding the individual demand curves.

c. represents the sum of the quantities demanded by all the buyers at each price of the good.

d. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.

When we move along a given demand curve,

all nonprice determinants of demand are held constant.

only price is held constant.

all determinants of quantity demanded are held constant.

d. income and price are held constant.

When the price of a good or service changes,

	a.	there is a movement along a given demand curve.
	b.	the demand curve shifts in the opposite direction.
	c.	the supply curve shifts in the opposite direction.
	d.	the demand curve shifts in the same direction.

The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price ﬂoor $3 above the equilibrium price in this market.

Price	Quantity Demanded	Quantity Supplied
$0	15	0
$1	13	3
$2	11	6
$3	9	9
$4	7	12
$5	5	15
$6	3	18

Following the imposition of a price floor $3 above the equilibrium price, irate buyers convince Congress to repeal the price ﬂoor and to impose a price ceiling $1 below the former price ﬂoor. The resulting market price is

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ECON 2010 Lecture Notes - Lecture 7: Monopolistic Competition, Oligopoly, Demand Curve

ECON 2010 Full Course Notes

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