ECON 1 Lecture 4: ECON1: Lecture 4 (10/4/16)
Document Summary
Supply and demand are forces that make market economies work. They determine the quantity of each good produced and the price at which it is sold. Ex: if there"s only one of something left, a consumer might offer to buy for higher price. Define market (review) - a group of buyers and sellers of a particular good or service. Buyers determine the demand for the product. Sellers determine the supply of the product. Define competitive market - a market with many buyers and sellers, where each has a negligible effect on the market price. Buyers and sellers are so numerous that no one can affect market price - each is a. *note* - in these chapters, we assume markets are perfectly competitive. *not all goods and services are sold perfectly competitive markets (ex: local cable company) Define quantity demanded - amount of a good that buyers are willing and able to purchase.
