Microeconomics: Competitive Markets

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Competitive Markets
market in which a large number of producers compete to satisfy the wants and needs of a large number of consumers
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Demand
the quantity of a product that consumers are willing and able to buy at different market prices over a period of time, all else being equal
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Market Demand
total demand in a whole market - sum of individual demand curves
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Effective Demand
Demand backed by purchasing power
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Notional Demand
Demand arising from just wanting a product - not backed by purchasing power
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Individual Demand
demand of an individual buyer
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Demand Schedule
data used to draw the demand curve
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Demand Curve
shows the relationship between the quantity demanded and the price
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Law of Demand
states there is an inverse relationship between the quantity demanded and the price, ceteris paribus
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Consumer Surplus
the extra amount a consumer is willing to pay above the price that has been paid
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Inferior Goods
Demand decreases as income increases
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Normal Goods
Demand increases as income increases, demand decreases as income decreases
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Luxury Goods
Large increase in demand as income increases
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Disposable Income
Income after taxes have been deducted and state benefit added
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Real Disposable Income
Income after taxes have been deducted, state benefit added and the result adjusted to account for changes in price levels
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Supply
the quantity of a product producers are willing and able to supply at each market price over a period of time
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Supply Curve
shows the relationship between the price and the quantity supplied
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Supply Schedule
the data used to draw up the supply curve of a product
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Individual Supply
the quantity an individual producer is able to supply
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Market Supply
the sum of all individual supply curves of all producers
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Producer Surplus
the difference between the market price which producers receive and the price at which they are prepared to supply at
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Other cards in this set

Card 2

Front

the quantity of a product that consumers are willing and able to buy at different market prices over a period of time, all else being equal

Back

Demand

Card 3

Front

total demand in a whole market - sum of individual demand curves

Back

Preview of the back of card 3

Card 4

Front

Demand backed by purchasing power

Back

Preview of the back of card 4

Card 5

Front

Demand arising from just wanting a product - not backed by purchasing power

Back

Preview of the back of card 5
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