How markets work Flashcards
1
Q
define the law of demand
A
the inverse relationship between the price of a good or service and the quantity that consumers are willing to buy in a defined time period
2
Q
define market
A
an arrangement where interacting buyers & sellers determines the price of goods & services exchanged
3
Q
what are some demand determinants?
A
(non-price determinants) - number of buyers, tastes & prefs, income, substitute’s prices
4
Q
what are some demand shifters?
A
change in income, advertising/marketing, price of substitutes
5
Q
define the law of supply
A
the direct (positive) relationship between an increase in quantity you want supplied and increased cost in production
6
Q
define market equilibrium
A
a market condition at any price at which quantity demanded and quantity supplied are equal
