ECONOMICS SUPPLY AND DEMAND

Review Three fundamental economic questions? Market Economy Command Economy Mixed Economy

Review Free Enterprise System Price Competition Non-Price Competition Freedom of Ownership Risk Profit Competition Price Competition Non-Price Competition Monopoly

Supply and Demand Supply: “amount of goods producers are willing to make & sell” example: 48 jackets, 20 sweatshirts, 15 tote bags Demand: “consumers willingness & ability to buy products” example: students wanted to buy the items above Supply and demand determine prices and quantities of goods and services produced

Supply = Demand Equilibrium Equilibrium: “when the amount of a product (supply) is equal to the amount consumers want (demand)” Supply = Demand

New Hot Item (circa 1983)

Surplus v. Shortage Surplus: Supply is high, Demand is low, Price is low Shortage: Supply is low, Demand is high, Price is high

Theory of Supply and Demand

Chapter Vocabulary Notebook Free enterprise system Freedom of ownership Risk Profit Competition Price competition Non-price competition Monopoly Supply Demand Equilibrium Economy Resources Factors of Production Land Labor Capital Entrepreneurship The 3 ?’s Market Economy Command Economy Traditional Economy