Mankiw经济学原理课件英文Chap04.pptVIP

The Market Forces of Supply and Demand Chapter 4 The Market Forces of Supply and Demand Supply and demand are the two words that economists use most often. Supply and demand are the forces that make market economies work. Modern microeconomics is about supply, demand, and market equilibrium. Markets A market is a group of buyers and sellers of a particular good or service. The terms supply and demand refer to the behavior of people . . . as they interact with one another in markets. Markets Buyers determine demand. Market Type: A Competitive Market A competitive market is a market. . . Competition: Perfect and Otherwise Products are the same Numerous buyers and sellers so that each has no influence over price Buyers and Sellers are price takers Competition: Perfect and Otherwise Monopoly One seller, and seller controls price Oligopoly Few sellers Not always aggressive competition Competition: Perfect and Otherwise Demand Quantity demanded is the amount of a good that buyers are willing and able to purchase. Law of Demand The law of demand states that there is an inverse relationship between price and quantity demanded. Demand Schedule The demand schedule is a table that shows the relationship between the price of the good and the quantity demanded. Demand Schedule Determinants of Demand Market price Consumer income Prices of related goods Tastes Expectations Demand Curve The demand curve is the downward-sloping line relating price to quantity demanded. Demand Curve Ceteris Paribus Ceteris paribus is a Latin phrase that means all variables other than the ones being studied are assumed to be constant. Literally, ceteris paribus means “other things being equal.” Market Demand Market demand refers to the sum of all individual demands for a particular good or service. Graphically, individual demand curves are summed horizontally to obtain the market demand curve. Determinants of Demand Market price Consumer income Prices of related goods Tastes Exp