Objective: Identify how supply and demand impact price

II. Supply and Demand Demand -desire to own something and the ability to pay for it Law of demand- When a good’s price is lower, consumers will buy more of it. When the price is higher, consumers will buy less of it.

Draw a Demand Curve “I’m Always negatively sloped!” -Demand Curve

Price Profits Price Profits Supply -the amount of goods available Law of supply- (Think like a producer) The higher the price, the larger the quantity produced. As price falls, quantity of supply falls. Price Profits Price Profits

Draw a Supply Curve “I’m Always positively sloped!” -Supply Curve

Equilibrium Price -When quantity demand and quantity supplied are at the same price Equilibrium is ideal for producers because more of their product gets sold Equilibrium is ideal for consumers because the right amount of product is available for the people who want it

Identify Equilibrium Price

Surplus -If supply exceeds demand When price is too high, goods and services are limited by demand

Shortage – if demand exceeds supply, there will be a shortage Price is too low so goods and services exchanged are limited by supply

Identify Shortage & Surplus