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Introduction to Supply and Demand definitions

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  • Supply and Demand Model
    A framework used to analyze interactions between buyers and sellers and predict market outcomes under specific assumptions.
  • Market
    A group where buyers and sellers interact, not necessarily in a physical location, to exchange goods or services.
  • Perfect Competition
    A market structure with identical products, many buyers and sellers, and no single participant influencing price.
  • Uniform Product
    A good that is indistinguishable from others in the market, making consumers indifferent to the producer.
  • Barrier to Entry
    Any obstacle that prevents new firms from entering a market, such as high startup costs or required expertise.
  • Price Taker
    A participant in a market who must accept the prevailing market price and cannot influence it individually.
  • Ceteris Paribus
    An assumption meaning 'other things equal,' used to isolate the effect of one variable in economic analysis.
  • Seller
    An individual or entity offering goods or services in exchange for payment within a market.
  • Buyer
    An individual or entity seeking to acquire goods or services in exchange for payment within a market.
  • Agricultural Product
    A good such as wheat or corn, often cited as an example due to its identical nature across producers.
  • Foreign Exchange Market
    A marketplace for trading currencies, often used as an example of a highly competitive environment.
  • Non-Perfectly Competitive Market
    A market where products are differentiated or sellers can influence prices, such as fast food or utilities.