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Lecture 3

ECO 211 Lecture Notes - Lecture 3: Economic Equilibrium, Equilibrium Point, Final Good


Department
Economics
Course Code
ECO 211
Professor
Lorca Maria
Lecture
3

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Chapter 3: Supply and Demand
Firm= the supply site of the market; selling something to the market
Consumers must be wiling and able to buy something
Price defines who gets what and in what amount
Price is set by supply and demand
Can change at any time because were operating in a free market
oMust have a free market for supply and demand to be relevant
Market economy (free market)
No government intervention
Price fluctuates due to supply and demand
In a voluntary fashion of buying and selling
Competitive markets
Characteristics
oMany buyers and sellers
oNo individual can influence the price
oPrice can change but must be by a tendency (beyond one individual)
oPrice is determined by the market
Monopoly
Imperfect market; has just one seller
Buyers only have two options: buy or not
oIn other markets, they have multiple options to buy from
oPrice fluctuates in a different way; buyer or seller can influence the price (in
other cases it’s the market that influences the price)
Demand
Really means demand curve (unless talking about quantity demanded)
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find more resources at oneclass.com
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