ECON 1100 Lecture Notes - Lecture 3: Market Clearing, Inferior Good, Aggregate Demand
7 Nov 2017
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Chapter 4- the market forces of supple and demand. Supply and demand are the forces that make market economics work. The quantity of each good produced and the price at which it is sold is determined by the behavior of people as they interact with one another in competitive markets. Market: a group of buyers and sellers of a particular good or service. The buyers determine the demand for the product and the sellers determine the supple. Competitive market: a market in which there are many buyers and many sellers so that each has a very very small impact on the market price. Perfect competition: the goods offered for sale are exactly the same, the buyers and sellers are so numerous that no single buyer or seller has any influence over the market price. *in a perfect competitive market buys and sellers are price takers. Quantity demanded: the amount of a good that buyers are willing and able to purchase.
