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A group of Buyers and sellers of a particular good or service. A market in which there are many buyers and many sellers so that each has a negligible impact on the market price. The amount of a good that buyers are willing and able to purchase. The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises. A table that shows the relationship between the price of a good and the quantity demanded. A graph of the relationship between the price of a good and the quantity demanded. A good for which, other things equal, and increase in income leads to an increase in demand. A good for which, other things equal, an increase in income leads to a decrease in demand. Two goods for which an increase in the price of one leads to an increase in the demand for the other. Two goods for which an increase in the price of one leads to a decrease in the demand for the other. The amount of a good that sellers are willing and able to sell. The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises. A table that shows the relationship between the price of a good and the quantity supplied. A graph of the relationship between the price of a good and the quantity supplied. A situation in which the market price has reached the level at which quantity supplied equals quantity demanded. The price that balances quantity supplied and quantity demanded. The quantity supplied and the quantity demanded at the equilibrium price. A situation in which quantity supplied is greater than quantity demanded. A situation in which quantity demanded is greater than quantity supplied. The claim that they rice of any good adjust to bring the quantity supplied and the quantity demanded for that good into balance. media type="youtube" key="FxBfepwj_WM" height="340" width="560"
 * Key Concepts**
 * Market**
 * Competitive Market**
 * Quantity demanded**
 * Law of Demand**
 * Demand Schedule**
 * Demand Curve**
 * Normal Good**
 * Inferior Good**
 * Substitutes**
 * Complements**
 * Quantity Supplied**
 * Law of Supply**
 * Supply Schedule**
 * Supply Curve**
 * Equilibrium**
 * Equilibrium Price**
 * Equilibrium Quantity**
 * Surplus**
 * Shortage**
 * Law of supply and demand**

The words economists use the most often are the words **//supply//** and **//demand//**. They are the two forces of a market economies work, and they determine the how many each good will be produced and at what price it is sold at.

Market - a group of buyers and sellers of a particular good or service.

Competition Quantity of produces sold are not determined by any single buyer or seller, because usually there are a lot of buyers or sellers. They all have offer their own price in either to buy or sell. This is often refered as //perfectly competitive// when there are **goods offered for sale are all exactly the same** and **there are so many buyers that not a single buyer or a seller**. However, when there is only ONE seller in a market it is referred as a monopoly. A good monopolist is Rockefeller. Monopolist can set a price because they own the whole market.

DEMAND

Relationship between price and Quantity demanded

Because the quantity demanded falls as the prices rises and rises as the price falls, we say that the quanitity demanded is NEGATIVELY RELATED to the price. This relationship between price and quantity demanded is true for almost all goods in the economy and it is also so pervasive that economists call it the LAW of DEMAND: other things equal, when the price of a good rises, the quanitity demanded of the good falls, and when the price falls, the quantity demanded rises.

Lets say that the price of item A is 0 dollars, then person A will consume 50 quantity annually however, as price rises they will continue to consume less every year until the price is so high they will not buy it. This is the demand schedule. A table that shows the relationship between the price of a good and the quantity demanded, holding constant everything else that influences how much consumers of the good want to buy.

THE DEMAND CURVE - a graph of a the relationship between the price of a good and the quantity demanded.

That is a demand curve. One important thing to consider is that the demand curve is the SUM of all the individual demands.

Shifts in the Demand Curve Any change that increases the quantity demanded at every price shift the demand curve to the right is called an increase in demand Any change that reduces the quantity demanded at every price shofts the demand curve to the left(decrease in demand.)

Reasons for change in Demand -income when demand falls when income falls for a good, it is refered as a normal good, however some do the right opposite and are inversely related and so they are referred as inferior goods -price of related goods when the price of related goods, or any products that can be replaced (aka substitutes) are often bought instead of the item itself. on other occasions the price of a related good falls and the demand rises, and so does the price of the good it was related to.(complements) -tastes -expectation -number of buyers-

SUPPLY

quantity supplied of any good or service is the amount that sellers are willing and able to sell. RED line is the SUPPLY

the relationships: quantity supplied is positively related to the price of the good. (according to the law of supply) When price rises, there is more supply people try to profit. so the price of a good determines how many is supplied.

like the demand curve, the supply curve is the supply of all individual supplies

Shifts in the supply curve Like the demand when the supply curve shifts to the left it decreases in supply; however at the same time, if it goes to the right it increases in supply.

Reasons to shift -Input prices people will find that they will be able to profit and will produce more quantity -technology -expectation -number of sellers

The point where the Supply curve and the demand curve is the market's equilibrium. This means the it is an equilibrium price and the quantity is called the equilibrium quantity.

Surplus a situation in which quantity supplied is greater than quantity demanded - excess supply So in this situation the price will cut until the demand and the supply meet to make equilibrium

Shortage shortage is often refered to as excess demand. When a shortage occurs in a product buyers have to wait longer to get this product, so there is a less chance to get the item.

LAW of supply and demand so the price of any good adjusts to bring the quantity supplied and quantity demanded for the good into BALANCE!!

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