ECON 201 Chapter Notes - Chapter 4: Perfect Competition, Demand Curve, Takers

• School: University of Maryland
• Department: Economics
• Course: ECON 201
• Professor: Naveen Sarna

Document Summary

The terms supply and demand refer to the behavior of people as they interact with one another in competitive markets. A market is a group of buyers and sellers of a particular good or service: buyers as a group determine the demand for the product, sellers as a group determine the supply of the product. Economists use the term competitive market to describe a market in which there are so many buyers and so many sellers that each has a negligible impact on the market price. Some markets have only one seller, and this seller sets the price. Other markets fall between the extremes of perfect competition and monopoly. The quantity demanded of any good is the amount of the good that buyers are willing and able to purchase: one determinant plays a central role: the price of the good.