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Econ- Exam I- Chapter 3
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Create
perfectly competitive market:
1.) many buyers and sellers
2.) all firms selling identical product
3.) no barriers to new firms entering
demand curve:
shows the relationship between the price of a product and the quantity demanded
market demand:
demand by all consumers of a given G or S
law of demand:
holding everything constant, when the P of a product falls the quantity demanded will increase
substitution effect:
change in the quantity demanded of a G that results from a change in price
income effect:
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
normal good:
demand increases as income rises, vice versa
inferior good:
demand increases as income falls
Author
cthuruth
ID
34803
Card Set
Econ- Exam I- Chapter 3
Description
macro
Updated
2010-09-15T02:04:22Z
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