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Supply and demand (Imposition of a rent ceiling (mechanism to maintain a…
Supply and demand
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Law of demand
As a price for a good falls, the quantity demanded increases. If the price for a good increases, the quantity demanded falls.
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Law of Supply
as the price of a good falls, the quantity supplied falls. If the price for a good increases, the quantity supplied increases.
The slope of the Supply Curve is influenced by logistical factors e.g. manufacturing costs, wages, tastes
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Equilibrium price
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in a competitive market, without the intervention of outside influences, equilibrium price and quantity are determined by the “invisible hand” aka the laws of Supply and Demand.
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In a perfectly competitive market you have a large number of buyers and sellers. All buyers and sellers have perfect information about the market. No one seller or buyer can wield and influence on the market. All goods being traded are the same. The price for the goods is determined by the market. Both the buyers and the sellers are price takers.
Buyers and sellers in our market trade with each other at a price determined by the market. The behaviour of buyers and sellers interacting in the market is referred to as “Supply and Demand”.