Economics Flashcard

Front

What is a highly competitive market?

Back

A market characterized by many buyers and sellers, where no single participant can influence the market price.

Front

What does it mean when we say 'no single buyer can influence the market price'?

Back

In a highly competitive market, individual buyers have little to no power to affect the overall market price due to the presence of many other buyers.

Front

How is the market supply curve calculated?

Back

By adding each producer’s supply curves horizontally.

Front

What is a normal good?

Back

A good for which demand increases as consumer income rises.

Front

What is represented on the horizontal axis of a demand curve?

Back

Quantity demanded.

Front

What is represented on the vertical axis of a demand curve?

Back

Price.

Front

What happens when Sam's profit does not cover his manufacturing costs?

Back

He will stop supplying the product.

Front

What is the definition of equilibrium price?

Back

The price at which the quantity demanded equals the quantity supplied.

Front

What is the law of demand?

Back

As the price of a good decreases, the quantity demanded increases, and vice versa.

Front

What is a substitute good?

Back

A good that can be used in place of another good.