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Terms in this set (23)
Perfectly Competitive market
A market that meets the conditions of: 1.) many buyers and sellers, 2.) All firms selling identical products, and 3.) no barriers to new firms entering the market.
This applies to a small few of of markets including wheat and agriculture markets.
A table that shows the relationship between the price of a product and the quantity of the product demanded.
the amount of good or service that a consumer is willing and able to purchase at a given price.
curve that shows relationship between the price of a product and the quantity of the product demanded.
The demand by all the consumers of a given good or service
Law of demand
The ruke that, holding everything else constant, when price of a product falls, Quantity Demand goes up. When price of product goes up, Quantity demand goes down.
the change in the quantity demanded of a good that results from a change in price, making good more or less expensive relative to other goods that are substitutes (pg 79).
the change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power.
Ceteris paribus ("All else equal') condition
The requirement that when analyzing the relationship between two variables- like price and quantity demand- other variables must be held constant. pg80
a good for which demand increases as income rises and decrease as income falls
A good for which the demand increases as income falls and decreases as income rises. pg 81
goods and services used together
characteristics of a population defined in age, race, and gender. IE the type of persons you may want to sell to.
The amount of a good or service that a firm is willing and able to supply at a given price.
A table that shows the relationship betweem the price of a product and the quantity of the product supplied.
A curve that shows the relationship between the price of a product and the quantity of the product supplied.
Law of Supply
the rule that, holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied. pg 87
A positive or negative change in the ability of a firm to produce a given level of output with a given quantity of inputs. pg88
A situatuin in which quantity demanded equals quantity supplied.
competitive market equilibrium
a market equalibrium with many buyers and sellers.
A situation in which the quantity supplied is greater than the quantity demanded pg91
a situation in which the quantitty demanded is greater than the quantity supplied pg91
goods that can be used for the same purpose as another good.
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