ECN 001A Lecture Notes - Lecture 6: Marginal Cost, Inverse Relation, Aggregate Demand
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People might not take action on their own, even if we already figured out all the steps, etc. Goal of economics is to create a system in which people will maximize their efficiency on their own personal, private benefit. Transfers to a higher willingness to pay. Firms can stay in business if the equilibrium price is equal to their price. Sellers need to find the equilibrium price to sell for. " price takers assumption = no one has an effect on the price (bc there are so many consumers and sellers) If costs were equal, no one changes their price. Ex. firms/consumers see the price, and decide whether or not to enter the market. No one seller/buyer can affect the price. Relationship between price and qd = the lower the price, the higher the demand (and vice versa) The one that firms are interested in. Shifts right when you add more people to the market.
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