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ECON 1000 Lecture Notes - Lecture 4: Demand Curve, Takers, Gateway Drug Theory

36 views7 pages
amberdog154
11 Dec 2016
School
Carleton University
Department
Economics
Course
ECON 1000
Professor
Eng Kooi Lim

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Document Summary

Chapter 4: the market forces of supply and demand. Market: a group of buyers and sellers of a particular good or service. Price and quantity are determined by buyers and sellers depending on supply and demand. Competitive market: a market in which there are many buyers and many sellers so that each has a negligible impact on the market price. No single buyer or seller can change the market. All goods offered in the market are identical. Numerous buyers and sellers so no one buyer or seller can change the market. The market determines the price: buyers and sellers are called price takers. Demand: the demand curve: the relationship between price and quantity demanded. Quantity demand: the amount of a good that buyers are willing and able to purchase. Quantity demanded is negatively related to the price. Demand schedule: a table that shows the relationship between the price a of a good and the quantity demanded.

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Related Questions

1. Markets and competition In a perfectly competitive market, all producers sell (perfectly identical/different) goods or services. Additionally, there are (few,many) buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price (takers,makers)

True or False: The market for lettuce does not exhibit the two primary characteristics that define perfectly competitive markets.

A competitive market is one in which:

a. is only one seller, but many buyers. 

b. are many sellers, and each has the ability to set the price of his product. 

c. are many sellers and compete with one another in such a way that some sellers are always being forced out of the market. 

d. are so many buyers and so many sellers that each has a negligible impact on the price of the product. 

Markets, viewed from the perspective of the supply and demand:

A. assume many buyers and many sellers of a standardized product.
B. assume market power so that buyers and sellers bargain with one another.
C. do not exist in the real-world economy.
D. are approximated by markets in which a single seller determines the price.