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LU2 : DEMAND, SUPPLY AND MARKET EQUILIBRIUM (Market equilibrium (Surplus,…
LU2 : DEMAND, SUPPLY AND MARKET EQUILIBRIUM
Market
Buyer and seller
Good and services
Interact with one another
Demand and supply
Competition
Perfect competition
Numerous buyer and seller
Same product
Price taker
Monopoly
One seller
Seller control price
Oligopoly
Few seller
Less aggressive
Monopolistic competition
Many sellers
Differentiated product
Set own price
Demand
Quantity of demand
Willing and able to purchase
Law of demand
Quantity demanded fall
Price rises
Demand schedule
Table that show the relationship of price and quantity demanded
Demand curve
Graph of price and quantity demanded
Change in demand
Shift in demand curve
Left or right
Caused by
Number of buyer
Consumer income
Normal good
Inferior good
Price of related good
Substitute good
Complement good
Expectation
Tastes
Change in quantity demanded
Movement along the curve
Due to the change in the price
Buyers
Supply
Quantity supplied
Willing and able to sell
Sellers
Law of supply
Quantity supplied rises
Price rises
Supply schedule
Table that show the relationship of price and quantity supplied
Supply curve
Graph of price and quantity supplied
Shift in supply curve
Number of seller
Expectation
Technology
Input price
Market equilibrium
Quantity supplied equals quantity demanded
Equilibrium price
Equilibrium quantity
Surplus
Price> Equilibrium price
Qs>Qd
Seller will decrease the price
Shortage
Price<Equilibrium price
Qd>Qs
Seller will increase the price
Law of supply and demand
QS=QD