The Economic Principles of Supply and Demand Supply

The Economic Principles of: Supply and Demand • Supply – represents willingness to sell at certain price – relationship between price and the quantity supplied (actually sell) • Demand – represents willingness and ability to buy at a certain price – relationship between price and quantity demanded (actually buy)

Supply and Demand Curve • Supply Curve – Law of Supply • the higher the price of the product, the more the producer will supply • Why? Because they can make more money by selling more product – Positive relationship with price, the curve is upward sloping • Demand Curve – Law of Demand • the higher the price of the product, the less the consumer will demand • I. E: Everyone’s resources are limited, so the higher the price the less people will buy – Negative relationship with price, the curve is downward sloping

Supply & Demand Curve …. . • Equilibrium is reached when both curves intersect. – At this point, the price is just high enough so that the quantity people want to buy is equal to the quantity business want to sell – the quantity demanded = the quantity supplied

Supply and Demand Curve http: //en. wikipedia. org/wiki/

Follow Up on Demand • Using the link below, watch the video and answer the following questions. 1) Explain the Law of Demand 2) Explain why the Law of Demand is downward sloping. (3 reasons) 3) What are the 5 shifters of Demand? https: //www. youtube. com/watch? v=Lw. Lh 6 ax 0 z. TE

Follow up on Supply • Using the link below, answer the following questions. 1) What is the Law of Supply? 2) List and briefly explain the 5 shifters of supply 3) Does a change in price change the Supply? 4) How does a surplus happen in a market? 5) Explain what Equilibrium is. https: //www. youtube. com/watch? v=ew. PNug. Iq. CUM&feature=iv&src_vid =Lw. Lh 6 ax 0 z. TE&annotation_id=annotation_3589862329