demand & supply model

• Why do we need assumptions in the demand and supply model?

  To simplify and model demand and supply together
• What is the first assumption of the demand and supply model?

  Goods represented must be identical
• How does the assumption of identical goods affect car prices?

  It assumes all cars have the same price
• What is assumed about consumer and producer knowledge in the model?

  They have complete knowledge about the goods
• What happens if there is imperfect information in the market?

  Prices for identical cars will vary
• What does the market consist of according to the model?

  A collective group of producers and consumers
• How does individual demand affect the market demand curve?

  • Individual demand does not shift the market demand curve
  • Individual influence is negligible compared to the market
  • Market demand shifts only with collective changes
• What does it mean that consumers and producers are price takers?

  They cannot influence market prices individually
• What is market equilibrium?

  Where quantity demanded equals quantity supplied
• What happens at the equilibrium point in the market?

  All goods are sold and consumed
• What is the price at which market equilibrium occurs called?

  Price equilibrium
• What does the demand curve look like?

  It is a downward sloping line
• What does the supply curve look like?

  It is an upward sloping line
• What are the key components of the demand and supply model?

  • Demand curve (downward sloping)
  • Supply curve (upward sloping)
  • Equilibrium point (where curves intersect)
  • Price equilibrium (specific price at equilibrium)
• Why is price necessary for exchanges in a market?

  It facilitates the exchange of goods and services
• What is the purpose of the video series mentioned at the end?

  • To provide engaging A-level economics resources
  • To offer bite-sized video tutorials
  • To help students understand economics easily