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PERFECT COMPETITION, REALISM: Perfect competition is an idealized market structure that does NOT exist in the real world. While some real world industries might come relatively close to one or two of the four key characteristics of perfect competition, none matches all four sufficiently that they can be declared PERFECTLY competitively. Some industries come close on the large number of small firms and the identical product characteristics. A few industries have relatively good, although not perfect, information about prices and technology. However, almost all industries fall far short of the perfect mobility characteristics.
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Lesson 5: Market Demand | Unit 1: Buying Basics
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Page: 4 of 20
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- Demand as the range of prices and quantities that buyers are willing and able to buy at different prices.
- Why buyers must be both willing and able to buy a good to have a demand. Willingness is based on tastes and preferences. Ability is based on income.
- Why demand includes a range of prices and quantities, not just a specific quantity.
- Why demand is analyzed during a given time period.
- Demand price as the maximum price that buyers would be willing and able to pay for a given quantity.
- Quantity demanded as the maximum quantity buyers would be willing and able to buy at a specific price.
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CONSUMER SURPLUS The satisfaction that consumers obtain from a good over and above the price paid. This is the difference between the maximum demand price that buyers are willing to pay and the price that they actually pay. A related notion from the supply side of the market is producer surplus.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway wanting to buy either a how-to book on home remodeling or a tall storage cabinet with five shelves and a secure lock. Be on the lookout for the last item on a shelf.
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This isn't me! What am I?
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The word "fiscal" is derived from a Latin word meaning "moneybag."
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"Old age isn't so bad when you consider the alternative. " -- Cato, Roman orator
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LF
Labor Force, Laissez-Faire
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