CHAPTER NO. 4THE MARKET FORCES OF DEMAND AND SUPPLY
A place where buyers and sellers negotiate for buying & selling of goods & services.
Single person controls the market
Two persons hold the market
A market situation when there are about five to twenty sellers of a commodity in the market.
When there are more sellers than oligoply but less than perfect competition (less than 100)
Perfect competition/ perfect market/ free market
100+ sellers, price taker, open entry & exit, total awareness, price set by demand & supply.
Willness to purchase + powers to purchase
Demand of a single person.
Agregate of all individual demands.
Law of demand
When price of a commodity increases, its demand decreases and vice versa.
Quantity of a good offered for sale in the market on a particular time.
Law of supply
When price of a commodity increases, oits supply also increases, and vice versa.
Market equilibrium/ demand and supply together
A situation when the quantity demanded and supplied become equal.
Price at equilibrium point.
Quantity demanded and supplied at equilibrium point.
Goods whose demand decreases with the increase in incomes of people and vice versa.
Goods whose demand increases wih the increase in incomes of people and vice versa.
Goods whose demand decreases with the increase in their prices and vice versa.
Goods whose demand increases with the increase in their prices and vice versa.
Goods which can be use in place of each other, like floor and rice.
Goods which cannot be uses without each other, like pen and ink.
It is left to right downward.
It is left to right upward.
Changes in demand
Change in the quantity demanded due to change in price or some other factors.
Movement of demand curve
Change in demand due to change in price.
Shift in demand
Change in demand due to some other factors than price.
Extension of demand
Increase in demand due to decrease in price.
Contraction of demand
Decrease in demand due to increase in price.
Rise in demand
Increase in demand due to some other factors thand price.
Fall of demand
Decrease in demand due to some oother fectors than price.
Changes in supply
Change in the quantity supplied due to change in price or some other factors.
Movement in supply
Change in supply due to change in price.
Shift in supply
Change in supply due to change in some other factors than supply.
Extention in supply
Increase in supply due to increase in price.