In chapter 4 we learned about the two key variables that make the market.... the market. Market referring to the group of buyers (DEMAND) and sellers (SUPPLY) of a good or service.
One of the most important parts of this chapter was the term of perfect competition. This can go one or two ways. One could be that the goods offered for sale are all exactly the same . The other way that it goes is that buyers and sellers are so numerous that no single buyer on seller has any influence over the market price. The first would be more of a highly organized commodity and the other would be having no market power. The big thing to know is that it's best to be perfectly competitive because what lies on the other end would be a monopoly.
PRICE TAKERS ARE THOSE WHO ACCEPT THE PRICE DETERMINED BY MARKETS.
So they don't have to buy things but they know and accept the price it is.
DEMANDDD
Demand is pretty self explanatory but it's super important to keep the law of demand in mind. This tells us that if the price of a good increases then the demand decreases. The demand schedule would then be a table that shows the relationship between the price and quantity demanded. The demand curve is then just the graphical representation of that data.
SUPPLYYY
Supply is also something hat I've been aware of my whole life and like the demand curve, it also has its own table and graph. Even more it has its own law: the claim that the quantity supplied of a good rises when the price of the good rises.
EQUILIBRIUM
The last big thing that the chapter talked about was equilibrium which is the situation in which the market price has reached the level at which quantity supplied equals quantity demanded.
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