ECON 160 Chapter Notes - Chapter 4: Demand Curve, Perfect Competition, Inferior Good
12 Nov 2016
School
Department
Course
Professor
Document Summary
The market forces of supply and demand. Supply and demand are the forces that make market economies work. They determine the quantity of each good produced and the price at which it is sold. The terms supply and demand refer to the behavior of people as they interact with one another in competitive markets: markets and competition. Markets take many forms, some are highly organized but more often markets are less organized. Market = a group of buyers and sellers of a particular good or service. The buyers as a group determine the demand for the product. The sellers as a gopu determine the supply of the product. Competitive market = a market in which there are so many buyers and so many sellers that each has a negligible impact on the market price. No single buyer of a product can influence the price of that product because each buyer purchases only a small amount.
