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My Booklet

by Manan Panwar


My Supply and Demand Booklet
By Manan
A market is a place where buyers and sellers interact with the purpose of exchanging goods and services.
In economics we have three main types of market competition:

Perfect competition

Imperfect competition

Perfect competition:
In this market there are many
sellers who sell identical
Example: Farmers’ markets
Imperfect competition:
In this market there are many
sellers who sell similar products.
Example: Cosmetic
In this market there is only
one seller of goods and services.
Example: Irish Rail

Be the seller: Manan is always looking to sell at the
highest price for his bag of cookies. The seller has
to cover all their costs while at the same time aiming to
make a profit for the business.

Be the buyer: YOU are looking to buy at the lowest
price and keep as much of your income as possible so
that you can spend it elsewhere.
Consumer Behavior
In Economics, we need to make certain assumptions about consumers and their
behaviour. These assumptions help economists, governments and businesses
make decisions about the Supply of their Goods and Services.
Price is the amount of payment a seller agrees to supply a product/service for, and a buyer agrees to pay for that
product/service. On the graphs representing demand and supply, price will always be on the y-axis.

Quantity is the amount of the product/service that is demanded by the consumer at a certain price and supplied by the supplier at a certain price. On the graphs representing demand and supply, quantity will always be on the x-axis.
Consumer Behavior
All consumers’ income is limited no
matter how much wealth they have
or income they earn.
Limited income:
Consumers aim to maximise their
utility (satisfaction), given their limited income.
The more a consumer consumes of a product, a point will be reached where they no longer get the same level of satisfaction (utility), e.g. An Easter egg.
Law of diminishing marginal utility:
A consumer will act in a way that is rational.
Rational decisions:
A consumer will act in a way that is rational.
The prices charged depend on another concept in economics: the
supply of goods and services, and the demand for goods and services.
Economists call this the law of supply and demand.
We examined that when price
increases, the demand decreases.
These changes in price and the
subsequent changes in quantity
demanded are known as movements
along the demand curve.

We will now look at other factors
which influence a shift in the demand
curve, i.e. curve moves left or right.