ECON 201 Chapter Notes - Chapter 4: Demand Curve, Perfect Competition, Inferior Good
8 Feb 2017
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Chapter 4: the market forces of supply and demand. Market: 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. Competitive market: a market in which there are many buyers and many sellers so that each has a negligible impact on the market price. Price and quantity are determined by all buyers and sellers as they interact in the marketplace. To reach this highest form of competition, a market must have two characteristics: The goods offered for sale are all exactly the same the buyers and sellers are so numerous that no single buyer or seller has any influence over the market price. Price takers: buyers and sellers must accept market price. Monopoly: occurs in a non perfectly competitive market, market with only one seller.
