EC120 Chapter Notes - Chapter 4: Frozen Yogurt, Demand Curve, Takers
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EC120 Full Course Notes
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Chapter 4: the market forces of supply and demand. Supply and demand are the forces that make market economies work by determining the quantity of each good produced and at what price they are sold! A group of buyers and sellers of a particular good or service. Competitive market: a market in which there are so many buyers and sellers that each has a negligible impact on the market price. Perfectly competitive markets 2 characteristics: (1) the goods ofered for sale are exactly the same, and (2) the buyers and sellers are so numerous that no single buyer or seller has any inluence over the market price. Because buyers and sellers have no inluence over market price, they are price takers. Monopoly one dominant seller setting the market price. The demand curve: the relationship between price and quantity. Quantity demanded: the amount of the good that buyers are willing to and able to purchase.
