The chapter talks about the relationship between supply and demand. It talk about how there is always competition to sell a good, otherwise a monopoly is established with all the power over one specific good. It talks about how the demand curve shows the relationship between one good and the quantity demanded. Also, the chapter deals with how the demand of a good depends on many factors such as the income of people, how much of the good there is, the price of the good and so on.
The chapter explains how the buyers determine the demand for a product and the sellers determine the supply of it. It talks about how there is a competitive market where there are more than one group of firms that produce and sell a certain good. Also, it talks about monopolies and how sometimes, there is only one provider for a specific good who usually makes a lot of profit out of it due to its scarcity. The chapter uses the example of ice cream and shows a graph that correlates a demand schedule showing the relationship between the price of a good and the quantity that is demanded.
Two examples of goods are a normal good and an inferior good. Basically, a normal good is a good that one buys when one has a lot of money. An inferior good is a good that one resorts to when ones income is lower. It also deals with the relationship between complements and supplements of goods.
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