RSM100Y1 Chapter Notes - Chapter 3: Planned Economy, Demand Curve, Monopolistic Competition
Document Summary
Economics: the social science that studies the choices people and governments make when dividing up their scarce resources. It is important to understand: how the activities of one industry affect the activities of other industries, how these activities fit into the overall picture of the country. Microeconomics: the study of small economic units (i. e. individual consumers, families, businesses etc. ) The choices about where to spend money also help to set the prices of goods and amounts sold. Demand: the willingness and ability of buyers to purchase goods and services. Supply: the willingness and ability of sellers to provide goods and services. Demand is affected by: customer preferences and incomes, prices of substitute and complementary items, number of buyers in the market, strength of the buyers" outlook for the future. Demand curve: a graph of the amount of a product that buyers will purchase at different prices.