Chapter 4 Key Terms Flashcards
Competitive market
A market in which there are many buyers and sellers so that each has a negligible impact on the market price
Market
A group of buyers and sellers of a particular good or service
Monopoly
Market with only one seller
Oligopoly
Market with only a few sellers
Monopolistically competitive
Market with sellers offering slightly different products
Quantity demanded
The amount of a good that buyers are willing and able to purchase
Law of demand
The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises
Demanded schedule
A table that shows the relationship between the price of a good and the quantity demanded
Demand curve
A graph of the relationship between the price of a good and the quantity demanded
Normal good
A good for which, other things equal,an increase in income leads to an increase in demand
Inferior good
A good for which, other things equal, an increase in income leads to a decrease in demand
Substitutes
Two goods for which an increase in the price of one leads to an increase in the demand for the other
Complements
Two goods for which an increase in the price of one leads to a decrease in the demand for the other
Quantity supplied
The amount of a good that sellers are willing and able to sell
Law of supply
The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises
