#cfa-level #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
Whenever the perceived value of a good exceeds the expected cost to produce it, a potential trade can take place. This fact may seem obvious, but it is fundamental to our understanding of markets.
If you want to change selection, open original toplevel document below and click on "Move attachment"
Parent (intermediate) annotation
Open itts for sale when they believe the payment they will receive exceeds their cost of production. Households are willing to purchase goods and services when the value they expect to receive from them exceeds the payment necessary to acquire them. <span>Whenever the perceived value of a good exceeds the expected cost to produce it, a potential trade can take place. This fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off.<span><body><html>Original toplevel document
2. TYPES OF MARKETSn goods markets: firms are sellers and both households and firms are buyers. For example, firms are buyers of capital goods (such as equipment) and intermediate goods, while households are buyers of a variety of durable and non-durable goods. <span>Generally, market interactions are voluntary. Firms offer their products for sale when they believe the payment they will receive exceeds their cost of production. Households are willing to purchase goods and services when the value they expect to receive from them exceeds the payment necessary to acquire them. Whenever the perceived value of a good exceeds the expected cost to produce it, a potential trade can take place. This fact may seem obvious, but it is fundamental to our understanding of markets. If a buyer values something more than a seller, not only is there an opportunity for an exchange, but that exchange will make both parties better off.
In one type of factor market, called labor markets , households offer to sell their labor services when the payment they expect to receive exceeds the value of the leisureSummary
| status | not read | | reprioritisations | |
|---|
| last reprioritisation on | | | suggested re-reading day | |
|---|
| started reading on | | | finished reading on | |
|---|
Details