ECON3000 Study Guide - Final Guide: Economic Rent, Product Differentiation, Diminishing Returns
Document Summary
Microeconomics- the study of how households and firms make decisions and how they interact in markets through the use of the market mechanism. The market mechanism is the technical name given to the way in which consumers and producers interact to determine what price a good or service will be exchanged for, and how many times that exchange will take place. Competitive market is a term used to describe a market in which there are so many buyers and so many sellers that each has a small impact on the market price. Each seller has limited control over the price as other sellers are offering similar products. When a key resource is owned by a single firm. A market is a group of buyers and sellers of a particular good or service. The buyers as a group determine the demand for the product and the sellers as a group determine the supply of the product.