ECON1001 Lecture Notes - Lecture 2: Ceteris Paribus, Laissez-Faire, Demand Curve

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14 Dec 2017
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Markets: institutions that bring buyers and sellers together, every market has these in the system. Market system- consumers decide what goes on the market, it"s by what the consumers want: a communist system is government system, laissez faire. System that doesn"t exist in high populations throughout the world. Nothing to do with government: price system- market economies use process to allocate resources, goods and services. Demand- the maximum amount of a product that buyers are willing to purchase over some period at various prices (ceteris paribus) The law of demand dictates that there is a negative opposite inverse relationship between price and quantity. When price does one thing quantity does the other: as price increases, quantity demanded falls, as price decreases quantity demand rises. Market demand curve: market demand: horizontal summation of all individual demand curves, horizontal summation: adding the number units of the product that will be supplied and purchased at each price.

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