The%20Economic%20Principles%20of:%20Supply%20and%20Demand

1
The Economic Principles ofSupply 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)

2
Supply and Demand Curve

• Demand Curve
• Law of Demand
• the higher the price of the product, the less the
  consumer will demand
• I.E Everyones resources are limited, so the
  higher the price the less people will buy
• Negative relationship with price, the curve is
  downward sloping

• 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

3
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

4
Supply and Demand Curve
http//en.wikipedia.org/wiki/
5
Follow Up on Demand

• Using the link below, watch the video and answer
  the following questions.
• Explain the Law of Demand
• Explain why the Law of Demand is downward
  sloping. (3 reasons)
• What are the 5 shifters of Demand?
• https//www.youtube.com/watch?vLwLh6ax0zTE

6
Follow up on Supply

• Using the link below, answer the following
  questions.
• What is the Law of Supply?
• List and briefly explain the 5 shifters of supply
• Does a change in price change the Supply?
• How does a surplus happen in a market?
• Explain what Equilibrium is.
• https//www.youtube.com/watch?vewPNugIqCUMfeatur
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