ECON 114 Lecture Notes - Lecture 4: Economic Equilibrium, Demand Curve
Document Summary
Chapter 4 the market forces of supply and demand. Supply and demand are the two words that economists use most oten. Supply and demand are the forces that make market economies work. They determine the quanity of each good produced and the price at which it is sold. If you want to know how any event or policy will afect the economy, you must think irst about how it will afect supply and demand. The terms supply and demand refer to the behavior of people as they interact with one another in compeiive markets. Before discussing how buyers and sellers behave, let"s irst consider more fully what we mean by a market and compeiion. Market a group of buyers and seller of a paricular good or service. Compeiive market a market in which there are many buyers and many sellers to that each has a negligible impact on the market place.
