CAS EC 101 Lecture Notes - Lecture 4: Demand Curve, Inferior Good, Normal Good

• School: Boston University
• Department: Economics
• Course: CAS EC 101
• Professor: Todd Idson

Document Summary

Chapter 4: the market forces of supply and demand. Supply and demand: words economists use most oten. The forces that make market economies work o: refer to the behavior of people as they interact with one another in compeiive markets. Market: a group of buyers and sellers of a paricular good or service, buyers as a group o. Markets take many forms: highly organized o. Market for ice cream in a paricular town. Compeiive market: market in which there are many buyers and many sellers. Each has a negligible impact on market price o: price and quanity are determined by all buyers and sellers. Perfectly compeiive market: goods ofered for sale are all exactly the same, buyers and sellers are so numerous. No single buyer or seller has any inluence over the market price. Must markets fall between perfect compeiion and monopoly. Quanity demanded: amount of a good that buyers are willing and able to purchase.