Week 8 Flashcards
1
Q
What does the demand curve represent?
A
The demand curve represents the willingness to pay of buyers.
2
Q
What does the supply curve represent?
A
The supply curves shows the seller’s willingness to accept money in return for the good or service at a price.
3
Q
What is the reservation price?
A
The lowest price at which someone is willing to sell a good (keeping the good is the potential seller’s reservation option).
4
Q
What is the supply curve?
A
A curve that shows the number of units of output that would be produced at a given price. For a market, it shows the total quantity that all firms together would produce at any given price.
