when consumers are willing to buy more than producers are willing to sell course hero

How to define a perfectly competitive market?

1) Define a "Perfectly Competitive Market". A market with many sellers and buyers but with no single buyer or seller that can affect the market price. 2) Explain the "Demand Curve" and the list of factors that affect an individual consumer's decision. Define how "Quantity Demand" is involved.

When is the demand for a product most likely to be?

If a product is a necessity and has no substitutes at all, demand for the product is most likely to be: (hint: both being a necessity and having no substitutes makes items less elastic) Suppose that your firm's marginal cost of producing a pencil is 5 cents and the average cost of producing a pencil is 3 cents.

When a profit-maximizing firm in monopolistic competition is in long run equilibrium?

When a profit-maximizing firm in monopolistic competition is in long-run equilibrium: monopolist. If the price elasticity of demand for tablets is 3, then a 10% increase in the price will result in an increase in total revenue. Table 5.4 presents the cost schedule for David's Figs.

How do firms use production cost process to increase sales?

QUESTION Firms use production cost process that allows more units to be sold at the same price, so more are sold 2 answers QUESTION Compare the impact on wages of workers if demand increased for them in an elastic labour supply versus and inelastic labour supply. i.e. McDonald's workers vs. NHL hockey players

What is the definition of a perfectly competitive market?

Terms in this set (28) 1) Define a "Perfectly Competitive Market". A market with many sellers and buyers but with no single buyer or seller that can affect the market price. 2) Explain the "Demand Curve" and the list of factors that affect an individual consumer's decision. Define how "Quantity Demand" is involved.

What is the negative relationship between price and quantity demanded?

As the price increases and nothing else changes, you would move upward along the demand curve and the consumer would buy a smaller quantity of items. If price increases 15-20 items, the quantity demanded decreased from eight to seven.

What happens when the price is above equilibrium?

If the price is above the equilibrium price, there will be excess supply for the product since the quantity supplied exceed quantity demanded, meaning producers are willing to sell more than consumers are willing to buy. This mismatch between demand and supply will cause the price to decrease.

What happens when the cost of production decreases?

When the cost of production decrease, the price required to generate any given quantity of good will decrease. Also a lower wage means a lower marginal cost of production, so each firm needs a lower price to cover its production so supply will increase (shift downwards). So the decrease in production costs the good production more profitable ...