1、CHAPTER 4 The Market Forces Of Supply And DemandMarket: It is a group of buyers and sellers of a particular good or service.Competitive Market: It is a market in which there are many buyers and many sellers so that each has a negligible impact on the market price. Quantity Demanded: The amount of a
2、good that buyers are willing and able to purchase.Law of Demand: It claim that, other things equal, the quantity demanded of a good falls when the price of the good rises.Demand Schedule: It is a table that shows the relationship between the price of a good and the quantity demanded.Demand Curve: It
3、 is a graph of the relationship between the price of a good and the quantity demanded. Normal Good: It means a good of which, other things equal, am increase in income leads to an increase in demand.Inferior Good: It means a good which, other things equal, an increase in income leads to a decrease i
4、n demand. Substitutes: It means two goods for which an increase in the price of one leads to an increase in the demand for the other. Complements: It means two goods for which an increase in the price of one leads to a decrease in the demand for the other.Quantity Supplied: The amount of a good that
5、 sellers are willing and able to sell.Law of Supply: It claim that, other things equal, the quantity supplied of a good rises when the price of the rises.Supply Schedule: It is a table that shows the relationship between the price of a good and the quantity supplied.Supply Curve: It is a graph of th
6、e relationship between the price of a good and the quantity supplied.Equilibrium: It is a situation in which the market price has reached the level at which quantity supplied equals quantity demanded.Equilibrium Price: The price that balances quantity supplied and quantity demanded.Equilibrium Quant
7、ity: The quantity supplied and the quantity at the equilibrium price.Surplus: It is a situation in which quantity supplied is greater than quantity demanded.Shortage: It is a situation in which quantity demanded is greater than quantity supplied. Law of Supply and Demand: The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.
