ECON101 Lecture Notes - Lecture 4: Monopsony, Market Power, Relative Price

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Wokia Kumase

Document Summary

Market: an arrangement that enables buyers and sellers to get information and do business with each other (e-commerce, physical markets, currency markets, etc: monopoly: a market with 1 supplier with millions of buyers, seller has market power. Money price: amount of money needed to buy a g/s. Demand: entire relationship between price of good and the quantity demanded of that good. If you demand something, then you need to want it, be able to afford it and have a plan to buy it: wants are unlimited: demand reflects a decision about which wants to satisfy, ex. If you make ,000 a year, your demand for a porsche (,000+) is 0 because you cannot afford it. Quantity demanded: amount that consumers plan to buy during a given time period at a particular price: quantity demanded is not always equal to quantity bought, choke price: when quantity demanded is 0, ex.