Market A group of buyers and sellers of a particular good Competitive market a market with many buyers and sellers perfectly competitive many firms identical goods many buyers wheat market buyers and sellers take price as given markets can be local international currency physical mall not physical internet Demand Downward Slope quantity demanded the amount of a good that buyers are willing and able to purchase law of demand all things equal the quantity demanded of a good falls when the price rises P Qd decreases market demand is the sum of individual demand demand schedule A table that shows the relationship between the price of a good and quantity demanded demand curve downward sloping line relating price and quantity demanded Market Demand sum of all individual demands for a good When factors beside price increase the Qd at every price the demand curve will shift to the right increase in demand When factors beside price decrease the Qd at every price the demand curve will shift to the right decrease in demand Factors affecting demand Income expectations number of consumers Income Relationships normal good demand falls when income falls all else being equal Inferior good a good for which all things equal an increase in income leads to a decrease in demand Substitutes when a fall in the price of a good reduces demand for another good frozen yogurt ice cream when an increase in price of one good increases demand for another an increase in the cost of ice cream reduces its demand increases demand for froyo Supply postion of the supply curve Qs the amount suppliers wish to sell quantity supplied the amount of a good that sellers are willing to sell law of supply all things equal quantity supplied of a good rises when the price rises supply schedule a table that shows the relationship between the price of a good and the quantity supplied supply curve a graph of the relationship between the price of a good and the quantity supplied Shifts in the Supply Curve surplus when quantity supplied is greater than quantity demanded when sugar prices fall ice cream is more profitable to sell results in an increase in supply Complements when a fall in the price of a good raises demand for another hot fudge prices fall ice cream supplied increases all shifts demand curve If the price of the good changes a movement along the demand curve Economist study changes in personal tastes expectations if you expect ice cream prices to fall you ll wait to buy and number of buyers