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Market |
A thing or place that brings together buyers and sellers (where goods and services are sold to consumers that want to buy goods) |
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Consumers |
People (buyers) that demands goods and services and want to buy them from firms or individuals (sellers) |
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Firms |
Businesses that sells goods or services to consumers |
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Demand |
Can only exist if consumers are both able and willing to buy goods and services |
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Market economy |
Determined by price |
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Law of demand |
All things being equal, the lower the price for a good, the higher the quantity demanded will be for that good |
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Law of supply |
All things being equal, the higher the price for a good, the more sellers will be able to supply that good |
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Product market |
Where households purchase goods for personal use from firms. Brings together buyers and sellers of goods and services. |
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Factor market |
Households buy goods and services, supply firms with labor to produce goods and services |
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Factors of Production |
Land, labor, capital, & entrepreneurs |
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