MGEA02H3 Lecture Notes - Lecture 3: Demand Curve, Market Power, Marginal Cost

• School: UTSC
• Department: Economics for Management Studies
• Course: MGEA02H3
• Professor: John Parkinson

Document Summary

The farmer"s market outside utsc: can be open everyday or depending on hours, goods = tangible, service = intangible, what is competition, the rivalry between suppliers and services with the goal of achieving revenue, perfectly competitive market, 1. Product is homogeneous: no brand loyalty, eg. Perfect information: no one gets fooled and makes mistakes, everyone has all the info they need, people are honest, 4. Free entry and exit in long run: no barriers to enter or exit, therefore there is no market power given to the producers and consumers, price competition is the main form, demand, demand curve. Illustrates the behavior of buyers: does not need to be linear but usually are assumed to be. Involves a movement along the demand curve: change in demand, refers to a shift or decrease in demand due to a shift of the demand curve, shifts in demand curve, price of a substitute.