ECE 394 Chapter Notes - Chapter 3: Perfect Competition, Opportunity Cost, Takers

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The up and down movement of process ensures the quantity of a product that is available stays in balance with the quantity consumers want to buy. Market economy: an economy in which private individuals, rather than a centralized planning authority, make the decisions. Market: buyers and sellers who trade a particular good or service. Competitive market: fully informed, price-taking buyers and sellers easily trade a standardized good or service. Demand: how much of something people are willing and able to buy under certain circumstances. Quantity demand: amount of a particular good that buyers in a market will purchase at a given price during a speci ed period. Nonprice determinants: affects the bene ts or the opportunity cost of buying a good even if the price remains the same. Consumer preferences: personal likes and dislikes that make buyers more or less inclined to purchase a good which in uence purchases preference will change over time.

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