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22 Cards in this Set
- Front
- Back
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Perfectly competitive market
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Where there are many buyers and sellers all the products sold in a gold and there are no barriers to new seller entering the market
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Quantity demanded
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Is the amount of a good or service that the consumer is willing and able to purchase at a given price
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Demand schedule
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Hey table that shows the relationship between the price of a product the quantity of the product demanded
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Demand curve
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Is a graph that shows the relationship between the price of a product in the quantity of the product demanded
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market demand
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The demand by all consumers of a good or service
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Law of demand
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States that ceteris paribus holding everything else constant the quantity of a product demand increases when the price falls and decreases when the price rises
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Substitution effect
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Be the change in quantity demanded that results from a price change making one good more less expensive related to another good
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Substitute
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Good that can be used for the same purpose
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Compliment
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Good that are used together
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Normal good
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Is that good for which demand increases as income increases
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Inferior good
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Is a good for which demand decreases as income increases
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Quantity supplied
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The amount of a good that a firm is willing and able to supply at a given price
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Supply schedule
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table that shows the relationship between the price of a product the quantity of the product supplied
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Supply curve
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Is a curve that shows the relationship between the price of a product and the quantity of the product supplied
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Law of supply
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State that holding everything else constantly quantity of a product supply increases when the price rises and decreases when the price falls
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Technological change
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A positive or negative change in the ability of a firm to produce at a given level of output with a given quantity of input
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Market equilibrium
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Occurs where the demand curve intersects the supply curve
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Competitive market equilibrium
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Has a market equilibrium with many buyers and sellers
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Surpluses
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With the quantity supplied being greater than the quantity demanded
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shortages
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With the quantity demanded being greater than the quantity supplied
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If demand increases more than supply
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Equilibrium price will rise
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if supply increases more than demand
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Equilibrium price will fall
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