CHAPTER 6: SECTION 2 Supply and Demand in Everyday Life Why the Long Lines for Concert Tickets? When some people are unable to purchase a good that they are willing and able to purchase, it means that quantity demanded exceeds quantity supplied. The result is a shortage in the market. The Difference in Prices for Candy Bars, Bread, and Houses In general, the price of many consumer goods is consistent throughout the United States. You can expect to pay approximately the same for a candy bar, or a loaf of bread, in any state.

Real estate prices demonstrate the impact of supply and demand Real estate prices demonstrate the impact of supply and demand. A house in San Francisco, California, will sell for approximately three to four times the price of a similar house in Louisville, Kentucky. Why don’t these two houses move toward an equilibrium price? Because of supply and demand. The houses come with the land on which they are built, and suppliers cannot pick up the land and move it to an area where there is higher demand. When the supply of a good cannot be moved in response to a difference in price between cities, as in our real estate example, prices for this good are likely to remain different in different cities.

Supply and Demand at the Movies Have you noticed that ticket prices to see a movie on Friday night are different than ticket prices for Sunday afternoon? A theater has a fixed number of seats. In response to higher demand on Friday night, it charges a higher price for those tickets.

Supply and Demand on a Freeway Most of the time, traffic is able to move freely on the freeway. However, during rush hour, the demand for freeway space increases. This results in a shortage of space and in slower traffic. One solution to freeway congestion is to build more freeways. Another is to convince people to carpool. Building more freeway space will increase the supply, helping to meet demand. Carpooling will reduce the demand, helping to reduce or eliminate the shortage. Yet another solution to freeway congestion is to charge a toll for freeway use.

Supply and Demand on the Gridiron Supply and demand even plays a part in high school athletics. There are a limited number of spots on some teams, and several people may compete for each spot. Athletes will have to train harder and impress the coaches to secure a spot when demand exceeds supply.

Supply and Demand on the College Campus Some colleges require higher GPAs or higher standardized test scores to gain admission. A college that is in high demand will have higher entrance requirements. Necessary Conditions for a High Income: High Demand, Low Supply To earn a high wage, a person must perform a job that is in high demand and that not many other people can do. If few know how to do the job, then supply will be low. Low supply and high demand will result in relatively higher wages.