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15 Cards in this Set
- Front
- Back
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Competitive market
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a market in which their are many competitive sellers and many buyers of the same product
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Supply and demand model
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model of how a competitive market works, supply curve goes up, demand curve goes down, y axis- price x axis- quantity
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Demand schedule
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the data used to draw a demand curve
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Quantity demanded
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the actual amount consumers are willing to buy at a specific price
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Law of demand
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the higher the price, the less the demand
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Substitutes
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goods that substitute another ex. Coffee vs. Tea
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Complements
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two goods that typically go together, if the price in one falls, purchase is more likely ex. Movie and popcorn
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Normal goods
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goods for which demand rises when consumer income rises
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Inferior goods
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goods for which demand rises when consumer income decreases
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Quantity supplied
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the actual amount of a good people are willing to sell at a specific price
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Input
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a good that is used to produce another good ex. Butter => popcorn
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Equilibrium price
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price at which the supply and demand curve intersect, when the price has moved to a level at which the quantity demanded of a good equals the quantity supplied of that good. Aka market clearing price
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Equilibrium quantity
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the quantity sold at equilibrium price
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Surplus
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when the quantity supplied exceeds the quantity demanded
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Shortage
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when the quantity demanded exceeds the quantity supplied
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