ECON 1BB3 Chapter Notes - Chapter 4: Frozen Yogurt, Takers, Shortage

• School: McMaster University
• Department: Economics
• Course: ECON 1BB3
• Professor: Bridget O' Shaughnessy

Document Summary

Supply and demand refers to how people interact with each other in markets. Market: a group of buyers and sellers of a particular good or service (buyers=demand / sellers=supply) Organized markets: where buyers and sellers meet at a specific time and place and are run by an auctioneer which helps in setting price and arranging sales. Ex buyers of ice cream in a town don"t meet together, and the ice cream sellers set their own prices. Perfect competition: 1) when all goods for sale are the same 2) when there are so many buyers and sellers that no single buyer/seller can influence over the market price. Price takers: the buyers/sellers, as they must accept the price the market determines. The demand curve: the relationship between price and quantity demanded. Quantity demanded: the amount of a good that buyers are willing and able to purchase.