Students will be able to use this knowledge to explain how they can benefit themselves and others by developing special skills and strengths. Markets exist when buyers and sellers interact. This interaction determines market prices and therefore allocates scarce goods and services. Students will be able to use this knowledge to identify markets in which they have participated as a buyer and as a seller and describe how the interaction of all buyers and sellers influences prices. They will also be able to predict how prices change when there is either a shortage or surplus of the product available.
Prices send signals and provide incentives to buyers and sellers.
When supply or demand changes, market prices adjust, affecting incentives. Students will be able to use this knowledge to predict how prices change when the number of buyers or sellers in a market changes, and explain how the incentives facing individual buyers and sellers are affected. Competition among sellers lowers costs and prices and encourages producers to produce more of what consumers are willing and able to buy. Competition among buyers increases prices and allocates goods and services to those people who are willing and able to pay the most for them. Students will be able to use this knowledge to explain how changes in the level of competition in different markets can affect them.