Microeconomics Chapter 3
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Ceteris paribus condition ("All else equal")
The requirement when analyzing the relationship between two variables such as price and quantity demanded- other variables must be held constant.
Competitive market equilibrium
A market equilibrium with many buyers and sellers.
A curve that shows the relationship between the price of a product and the quantity of the product demanded.
A table that shows the relationship between the price of a product and the quantity of the product demanded.
The change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power, holding all other factors constant.
Law of supply
The rule that, holding everything else constant, increases in price cause increases int he quantity supplied, and decreases in price cause decreases in the quantity supplied.
A situation in which quantity demanded equals quantity supplied.
Perfectly competitive market
A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.
The amount of a good or service that consumers are willing and able to purchase at a given price.
The amount of a good or service that a firm is willing and able to supply at a given price.
A curve that shows the relationship between the price of a product and the quantity of the product supplied.
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