COMMERCE 1B03 Chapter Notes - Chapter 4: Heat Wave, Kraft Dinner, Economic Equilibrium

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1B03
• Professor: Rita Cossa

Document Summary

Microeconomics chapter 4 (market force for supply & demand) Market group of buyers/sellers at a particular moment (not necessarily at the same place) Competitive market many buyers/sellers, each with a negligible effect on price. Perfect competitive market all goods are considered the same. So many buyers and sellers that none of them effect the price (price-takers) Quantity demanded amount of goods that buyers are willing/able to purchase. Law of demand: when the price of a good rises, the quantity demanded falls (other things equal) Demand schedule table that shows the relationship between price of a good and quantity demanded. Demand curve is based off of this. Market demand sum of all individual demands. Demand curve shows how price affect quantity demanded (other things equal) # of buyers increases quantity demanded, resulting in a shift to the right. Normal goods positively related to income (as income increases, good demand increases)