Chapter 4 Flashcards
(18 cards)
individual supply curves
a graphical representation that shows the positive relationship between the price and quantity supplied
market supply curve
horizontal summation of the supply curves for individual firms
market
the process of buyers and sellers exchanging goods and services
competitive market
a market where the many buyers and sellers have little market power—each buyer’s or seller’s effect on market price is negligible
law of demand
the quantity of a good or service demanded varies inversely (negatively) with its price, ceteris paribus
quantity demand
amount that consumers plan buy it on given period of particular price
individual demand schedule
a schedule that shows the relationship between price and quantity demanded
individual demand curve
a graphical representation that shows the inverse relationship between price and quantity demanded
market demand curve
the horizontal summation of individual demand curves
change in quantity demanded
a change in a good’s own price leads to a change in quantity demanded, a move along a given demand curve
change in demand
the prices of related goods, income, number of buyers, tastes, and expectations can change the demand for a good; that is, a change in one of these factors shifts the entire demand curve
How change in a good’s price change in quantity demanded ?
move along demand curve
substitute
related goods ( Pepsi = cola )
substitute
an increase (decrease) in the price of one good causes the demand curve for another good to shift to the right (left
complements
an increase (decrease) in the price of one good shifts the demand curve for another good to the left (right)
complements
go together (doner = ayran)
normal good
if income increases, the demand for a good increases; if income decreases, the demand for a good decreases
inferior goods
if income increases, the demand for a good decreases; if income decreases, the demand for a good increases
