Textbook Guide Economics: Demand Curve, Peanut Butter, Perfect Competition

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1 Dec 2016

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ECO101H1 Full Course Notes

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Document Summary

Perfectly competitive markets have identical goods throughout the market and have a high enough amount of buyers and sellers that no single buyer or seller has influence over market price. The following is a demand schedule of an ice-cream cone: a demand curve is the visual representation through a graph of the relationship between the price of a good and the quantity demanded. Changes in income can alter the demand of a good or service. When demand for a good decreases when income decreases, it is referred to as a normal good. When demand for a good increases when income decreases, it is referred to as an inferior good. Changes in prices of related goods can alter the demand of a good or service. When demand for a good increases when the price of another good increases, the two goods are called substitutes.

Related Questions

1. In a competitive market, the quantity of a product produced and the price of the product are determined by

a. buyers.

b. sellers.

c. both buyers and sellers.

d. None of the above is correct.

2. Which of the following statements is correct?

a. Buyers determine supply and sellers determine demand.

b. Buyers determine demand and sellers determine supply.

c. Buyers determine both demand and supply

d. Sellers determine both demand and supply

3. The demand for a good or service is determined by

a. those who buy the good or service

b. the government.

c. those who sell the good or service.

d. both those who buy and those who sell the good or service.

4. An increase in supply is represented by

a. a movement downward and to the left along a supply curve.

b. a movement upward and to the right along a supply curve.

c. a rightward shift of a supply curve.

d. a leftward shift of a supply curve

ceruleanseal203

1. Markets and competition In a perfectly competitive market, all producers sell (perfectly identical/different) goods or services. Additionally, there are (few,many) buyers and sellers. Because of these two characteristics, both buyers and sellers in perfectly competitive markets are price (takers,makers)

True or False: The market for lettuce does not exhibit the two primary characteristics that define perfectly competitive markets.

In a competitive market, each seller has limited control over the price of his product because

a.other sellers are offering similar products.

b.in competitive markets, buyers have more influence over price than sellers.

c.the products sold in competitive markets are generally in abundant supply.

d.sellers in competitive markets prefer to meet and set a price that each will profit from.