Firms, markets, and price

Firms, markets, and price

Lessons


Coordination in An Economy

Firm: a business organization that hires factors of production, and utilizes those factors to produce goods and services to sell.


Market: a medium that allows buyers and sellers to get information, and do business with each other by exchanging goods and services.

Property Rights: A social agreement that presides over the legal ownership, use, and disposal of resources, goods, or services.

Money: is any commodity or token that is acceptable as payment for goods and services.

Competitive Market and Price

Competitive Market: a market with many buyers and sellers so that no single buyer or seller can influence the price.

Money Price: the amount of money needed to buy a good or a service.

Relative Price: the ratio of one good relative to the price of another good. This is an opportunity cost.
  • Introduction
    Firms, Markets, and Price Overview:
    a)
    Coordination in An Economy
    • Four complementary social institutions
    • Firm
    • Market
    • Property Rights
    • Money

    b)
    Competitive Market and Price
    • Competitive Market
    • Money Price
    • Relative Price