1/20/2024 0 Comments What happened to flat ioWe speak of equilibrium because there is a balancing of the forces of supply and demand in the market. In a competitive market, equilibrium price and quantity are determined by the intersection of the supply and demand curves. In a competitive market, buyers and sellers take the price as given they think their actions have no effect on the price in the market. The goods that sellers produce are perfect substitutes.There are many buyers and many sellers, all of whom are small relative to the market.A market is said to be competitive, or, more precisely, to exhibit perfect competition, under two conditions: The supply-and-demand framework applies to the case that economists call a competitive market A market that satisfies two conditions: (1) there are many buyers and sellers, and (2) the goods the sellers produce are perfect substitutes. The toolkit contains a presentation of supply and demand that you can use for reference purposes in this and the following chapters. The intersection of supply and demand determines the equilibrium price and quantity that will prevail in the market. A point on the market demand curve shows the quantity that demanders are willing to buy for a given price. A point on the market supply curve shows the quantity that suppliers are willing to sell for a given price. is a framework we use to explain and predict the equilibrium price and quantity of a good. Supply and demand A framework that explains and predicts the equilibrium price and equilibrium quantity of a good. Toolkit: Section 16.6 "Supply and Demand"
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