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the market forces of supply and demand ((demand (factors affect demand…

- - - - is a group of buyers and sellers of a particular good or service
    - - is one in which there are many buyers and many sellers so that each has a negligible impact on the market price.
  - - - is the amount of a good that buyers are willing and able to purchase
    - - the quantity demanded of a good falls when the price of the good rises
    - - market demand=the sum of individual demand
    - - consumer income
        
        normal goods
        
        a good for which ceteris paribus, an increase in income leads to an increase in quantity demanded
        
        E.g. overseas holiday
        
        inferior goods
        
        a good for which, ceteris paribus, an increase in income leads to a decrease in quantity demanded.
        
        E.g. second hand furniture
      - prices of related goods
        
        substitute goods替代品
        
        two goods where a decrease in the price of one good leads to a decrease in the demand for the other good
        
        两种物品，如果一种物品价格的上升引起另一种物品需求的增加，则这两种物品被称为替代品
        
        比如可口可乐与百事可乐。甲与乙不共戴天。
        
        complement goods互补品
        
        Complement goods: two goods where a decrease in the price of one good leads to an increase in the demand for the other good.
        
        互补品指两种商品必须互相配合，才能共同满足消费者的同一种需要，如照相机和胶卷，车和汽油
      - tastes偏好
        
        is butter good for you
      - expectation
        
        现在投资房地产否？
      - number of buyers
        
        为什么公司喜欢投资奥运会广告?
    - - Quantity demanded
        
        Causes a change in the quantity demanded of the product
        Is illustrated by a movement along the demand curve
      - demand
        
        Cause a change in the demand of a product
        Is illustrated by a shift in the demand curve
  - - - quantity supplied
        
        is the amount of a good that sellers are willing and able to sell
      - the law of supply
        
        Ceteris paribus, the quantity supplied of a good rises when the price of the good rises
    - - market supply=sum of firm supply
    - - input price
        
        e.g 原材料价格，生产成本
      - technology
        
        lower the cost
      - number of sellers
      - expectations
    - - Quantity supplied
        
        Causes a change in the quantity supplied of the product
        Is illustrated by a movement along the supply curve
      - supply
        
        Cause a change in the supply of a product
        Is illustrated by a shift in the supply curve
  - - - Demand and supply jointly determine market prices and quantity.
      - When the quantity supplied equals the quantity demanded in a market, the market is said to be in equilibrium.
    - - A shortage/surplus occurs when, at the market price, the quantity demanded is greater/smaller than the quantity supplied.
    - - The analysis of a change in equilibrium is called comparative statics.
      - We proceed in three steps
        
        Decide whether the event shifts the supply or demand curve (or perhaps both)
        
        Decide in which direction the curve shifts
        
        Use the supply and demand diagram to see how the shift changes the equilibrium