ECON 222 Lecture Notes - Lecture 4: Normal Good, Demand Curve
Document Summary
Chapter 4 the market forces of supply and demand: markets and competition. Supply and demand word economists use most often the forces that make market economies work refer to the behavior of people as they interact with one another in competitive markets. A group of buyers and sellers of a particular good or service. Market in which there are many buyers and many sellers. Each has a negligible impact on market price. Price and quantity are determined by all buyers and sellers. Amount of a good that buyers are willing and able to purchase. When he price of a good rises, the quantity demanded of the good falls. When the price falls, the quantity demanded rises. Relationship between the price of a good and quantity demanded. Sum of all individual demands for a good or service. Market demand curve sum the individual demand curves horizontally. Increase in the demand any change that increases the quantity demanded at every price.