Vacations all inclusive on How much someone buys or sells of this good depends on its price. In a market equilibrium, a price will obtain at which aggregate supply is just enough to satisfy aggregate demand (the price is said to clear the market). The price of a good is hence the outcome of the sum of all demand and supply decisions. The very fact that goods have prices through which their value can be determined in a meaningful way, is the consequence of individuals interacting as buyers and sellers in markets.
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In markets with many consumers and many firms, each single participant has only a small influence on the price. If the number of market participants is large enough so that each agent can neglect the influence of her actions on aggregate variables, then microeconomists speak of perfect competition. In a relatively small group of individuals, on the other hand, one must account for the fact that each person's actions directly affect the choices of others (imperfect competition).
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