Imagine you sell computers… A Lenovo Laptop has a price tag of $800, but no one is buying it. What do you do? Why?

Objective: Explain and graph shortages, surpluses, and equilibrium prices; analyze market prices Guiding Question: How can buyers get the best possible deal and sellers still make the most money possible?

Imagine that a new type of digital camera hits the marketplace. At $125, producers supply a large number of cameras, but only half are sold. The next week, the price is reduced to $85, and the cameras are all gone in the middle of the week with people asking for more. The following week, the price is increased to $105 and almost all the cameras that were supplied are sold. At $125, there was a surplus of cameras At $105 per camera, the market was in equilibrium At $85 there was a shortage

 A surplus occurs when the quantity supplied is more than the quantity demanded (Qs > Qd)  When there is a surplus: lower price $ What is the Qs when iPods are $75? What about the Qd?

 A shortage happens when the quantity supplied is less than the quantity demanded (Qs < Qd)  When there is a shortage: you can raise the price $ What is the Qs when iPods are $25? What is the Qd?

 Equilibrium is the condition when the quantity supplied equals the quantity demanded (Qs = Qd)  Equilibrium is like a magnet, there is always pressure to move to this point Sellers want to sell iPods for $50 because they can sell more and buyers like it because it is cheaper

 Quantity Supplied is 400, Quantity Demanded is 200  Quantity Supplied is 150, Quantity Demanded is 200  Quantity Supplied is 75, Quantity Demanded is 75  Quantity Demanded is 200, Quantity Supplied is 140  Quantity Supplied is 15, Quantity Demanded is 10 Surplus of 200 Equilibrium Shortage of 50 Shortage of 140 Surplus of Five

DEMAND SCHEDULE PriceQd $15400 $20325 $25250 $30175 $35 SUPPLY SCHEDULE PriceQs $15300 $20330 $25360 $30390 $35 Use the supply and demand schedules above to create one demand curve showing both data-sets. Remember your labels! Challenge: figure out the mathematical sequence in each schedule and add the final answer to your graph. (When the price is $35, what is the supply? The demand?)