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competitive market equilibrium
a market equilibrium with many buyers and sellers
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market equilibrium
a situation in which quantity demanded equals quantity supplied
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variables that shift market supply, changes in:
- price of resource
- technology of production
- seling price of production substitute
- number of firms
- expected future prices
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law of supply
increases in price causes increases in the quantity supplied and vice versa, ceteris paribus
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supply curve
a curve tha shows the relationship between the price of a product and the quantiy of the product supplied
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supply schedule
a table that shows the relationship between the price of a product and the quantity of the product supplied
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quantity supplied
the amount of a good or service that a firm is willing ad able to supply at a given price
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variables that shift market demand, changes in:
- income
- price or desirability of related goods
- tastes and preferences
- populations and demographics
- expected future prices
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income effect
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
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substitution effect
the change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods that are substitutes
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law of demand
when the price of a product falls, the quantity demanded of the product will increase, and vice versa, ceteris paribus
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market demand
the demand byall consumers of a given good
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demand curve
curve that shows the relationship between the price of a product and the quantity of the product demanded
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quantity demanded
amount of a good that a consumer is willing and able to purchase at a given price
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demand schedule
a table showing the relationship between the price of the product and th quantity of the product demanded
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perfectly competitive market
- 1. Many buyers and sellers
- 2. homogenous product
- 3. no barriers
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