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Market
A group of buyers and sellers of a particular good or service
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Competitive Market
A market in which there are many buyers and many sellers so that each has a negligible impact on the market price
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Quantity Demanded
The amount of a good that buyers are willing and able to purchase
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Law of Demand
The claim that, other things equal, the quantity demanded of a good falls when the price of a good rises
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Demand Schedule
A table that shows the relationship between the price of a good and the quantity demanded
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Demand Curve
A graph of the relationship between the price of a good and the quantity demanded
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Normal Good
A good for which, other things equal, an increase in income leads to in increase in demand
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Inferior Good
A good for which, other things equal, an increase in income will lead to a decrease in demand
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Substitutes
Two goods for which an increase in price of one leads to an increase in the demand for the other
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Complements
Two goods for which an increase in the price of one leads to a decrease in the demand for the other
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Quantity Supplied
The amount of a good that sellers are willing and able to sell
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Law of Supply
The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises
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Supply Schedule
A table that shoes the relationship between the price of a good and the quantity supplied
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Supply Curve
A graph of the relationship between the price of a good and the quantity supplied
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Equilibrium
A situation in which the market price has reached the level at which quantity supplied equals quantity demanded
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Equilibrium Price
The price that balances quantity supplied and quantity demanded
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Equilibrium Quantity
The quantity supplied and the quantity demanded at the equilibrium price
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Surplus
A situation in which quantity supplied is greater than quantity demanded
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Shortage
A situation in which quantity demanded is greater than quantity supplied
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Law of Supply and Demand
The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance
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