ECON 2304 Chapter Notes - Chapter 4: Demand Curve, Inferior Good, Takers
11 Sep 2016
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Chapter 4 textbook notes: the market forces of supply and. Supply and demand are forces that make market economies work: determine quantity of each good produced and the price at which it is sold. Supply and demand behavior of people as they interact with one another in competitive markets. Market group of buyers and sellers of a particular good or service: buyers determine demand for product, sellers determine supply of product. Competitive market describe a market in which there are so many buyers and so many sellers that each has a negligible impact on the market price: example: ice cream. Seller of ice cream is competing with other sellers offering similar product. Seller has little reason to charge less than the going price and cannot charge more because customers will buy from someone else. No single buyer of ice cream can influence the price of ice cream because each buyer purchases a small amount.
