ECO 1104 Lecture Notes - Lecture 4: Demand Curve, Perfect Competition, Inferior Good

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: Claude Théorêt

Document Summary

The terms supply and demand refer to the behaviour of people as they interact(cid:523) (cid:524) with one another in competitive markets (cid:523) (cid:524) Market: a group of buyers and sellers of particular(cid:523) (cid:524) good or service. Buyers as a group determine the demand for the product. Sellers as a group determine the supply of the product. Markets take many forms: (ighly organized: markets for many agricultural commodities. Less organized: market for ice cream in a particular town. Competitive market: a market in which there are many buyers and sellers so that each has a negligible(cid:523) (cid:524) impact on the market price. Price and quantity are determined by all buyers and sellers as they interact in the marketplace. )n this chapter, assumed that markets are perfectly competitive. Goods offered for sale are all exactly the same. Buyers and sellers are so numerous(cid:523) (cid:524) that no single buyers or seller has any influence over the market price.