Competitive Markets
- Created by: Former Member
- Created on: 04-05-15 10:20
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- Competitive Markets.
- Market Defintion
- Where buyers / sellers exchange goods / services, usually for money.
- Markets are a way of allocating resources.
- It doesn't have to be a place, or involve a physical exchange.
- e.g someone will exchange their resource (labour) for a salary.
- Free Market
- Allocates resources based upon supply and demand and the price mechanism.
- The Price Mechanism: changes in the demand / supply of a good / service leads to changes in its price / quantity bought / sold.
- Allocates resources based upon supply and demand and the price mechanism.
- Definition:
- Large numbers of producers compete with each other to satisfy the wants and needs of a large number of consumers.
- Market Failure:
- Happens when the free market results in undesirable outcomes.
- Market Defintion
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