Chapter4: The Market Forces of Supply and Demand(250)

Chapter 4 is focuses on the forces of supply and demand in a market. A market is a group of people who participate in the purchasing of a specific good or service. There are multiple types of markets: monopolistic competitive, perfectly competitive, competitive, and monopoly. Each market is distinguished by its competitiveness and if buyers and sellers have market power. In addition, a trend that follows supply and demand is the Law of Demand; when the price of a good or service increases, the quantity of demand decreases. And when the price of the good or service decreases, the quantity of demand is greater. Methods of depicting the Law of Demand are these demand schedule and demand curve. The demand schedule shows the relationship between the price of a good and the quantity demanded in a table and the demand curve shows the relationship between the price of a good and the quantity demanded in a graph. The demand curve shifts when there is an increase of decrease in quantity of demand. The curve shifts right when the demand increases and shifts left when the demand decreases. Other factors that contribute to shifts are income, price of related goods, tastes, expectations, and the number of buyers.