PHYSICS 102 Lecture Notes - Lecture 13: Demand Curve, Normal Good, Inferior Good
Document Summary
Benefit and costs- weigh up - costumer - money reference. Supply- offer tomatoes - production process - do not create stocks- production price. Cost refers to the payment to factor inputs in production. The market for a product is not a particular place but any situation where the buyers and sellers engage in exchange: markets exist in many forms and buyers and sellers don"t have to meet to make a deal. Markets have buyers and sellers; none of them has a significant impact on determining the market price. Assumptions of the model of supply and demand: many buyers and sellers, homogenous goods, perfect information, buyers and sellers are clearly defined, clearly defined and enforced property rights. Zero transaction costs. no side costs- no bank fee etc Everyone is comparing the benefits and the costs, weighed up, purely comparing. Ii- supply and the relationship between price and quantity.
