Supply and Demand in a Market Economy. What is Supply and Demand? Supply = The amount of a good or service that a producer is willing & able to make available.

Slides:

Advertisements

Similar presentations

6-1: Seeking Equilibrium: Demand and Supply

Advertisements

3.02Interpret the theory of supply and demand. Supply vs. Demand Supply- the amount Producers are willing and able to produce and sell. Supply- the amount.

PRICES Chapter 5.

MARKETS AND COMPETITION

Copyright © 2004 South-Western 4 The Market Forces of Supply and Demand.

Intro to Market Equilibrium

Theory of Supply and Demand

2 SUPPLY AND DEMAND I: HOW MARKETS WORK. Copyright © 2004 South-Western 4 The Market Forces of Supply and Demand.

SUPPLY AND DEMAND I: HOW MARKETS WORK. Copyright © 2004 South-Western The Market Forces of Supply and Demand.

Here are two examples of government intervention in a market.

Economics Chapter 7 Supply and Demand.

Copyright © 2004 South-Western SUPPLY Quantity supplied is the amount of a good that sellers are willing and able to sell. Law of Supply The law of supply.

© 2010 Pearson Addison-Wesley. Demand and Supply Supply and demand are the two words that economists use most often. Supply and demand are the forces.

Demand. Quantity of a product that buyers are willing and able to purchase at any and all prices Consumers are interested in receiving the most satisfaction.

Supply and Demand In this presentation, I will tell you about Supply and Demand, that this such how and when it changes. The student of BE-11 group, full-time.

The Market System Demand, Supply and Price Determination.

Copyright © 2004 South-Western Unit #2 Supply and Demand Supply and demand are the two words that economists use most often. S/D are the forces that make.

Introduction to Economics Eco-101 Lecture # 02 THE PRICE MECHANISM Demand and Supply Analysis Instructor: Farhat Rashid.

5.1 – An Economic Application: Consumer Surplus and Producer Surplus.

Supply & Demand Chapter 2. Demand Desire, willingness & ability to buy a product Desire, willingness & ability to buy a product Must Must Want to buy.

Demand and Supply. In a market economy prices are set by a kind of interaction. The interaction is the effect that two forces- demand and supply- have.

© 2007 Thomson South-Western Demand, Supply and Market Equilibrium.

Chapter 7: Demand and Supply. A. Demand Think about a time you went shopping: Did you see something in the store and thought “who would ever buy that?!”

Price: Supply and Demand Together 9B Social – Economics.

Supply & Demand. Before We Start Economic Terms: Market Competitive Market Perfectly Competitive Normal Good Inferior Good Substitutes Complements Ceteris.

Supply and Demand Chapter 1, 1.3 (part 2). THE LAW OF DEMAND The law of demand says : as the price of a good or service rises, its quantity demanded falls.

Section 2.  – the quantity of goods that are sold at a specific price.  The quantity of goods that are produced/exist.

Unit 2. The law of demand states that as price decreases, quantity demanded increases. An inverse relationship exists. The law of demand is dependent.

Chapter 2 Supply and Demand Issues In Economics Today, 4e Guell McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.

The Single Market Demand, Supply, and Equilibrium J.F. O’Connor 2/7/00.

The Market Forces of Supply and Demand. Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Market Forces of Supply and Demand.

Demand Defined Demand Graphed Changes in Demand Supply Defined Supply Graphed Changes in Supply Equilibrium Surpluses Shortages Individual Markets: Demand.

2.02 Supply and Demand Understand Economics and Economic Systems Interpret supply and demand graphs.

Lesson 14: Supply and Demand. Objectives Give real-world examples of product surplus, shortage, equilibrium, and diminishing marginal utility Give real-world.

© 2007 Thomson South-Western A market is a group of buyers and sellers of a particular good or service. The terms supply and demand refer to the behavior.

2 SUPPLY AND DEMAND I: HOW MARKETS WORK. Copyright © 2004 South-Western 4 The Market Forces of Supply and Demand.

2 SUPPLY AND DEMAND I: HOW MARKETS WORK Copyright © 2004 South-Western A Market Economy Consumer: a person who buys and uses goods and services Producer:

Essential Question: What is the right price?.  Putting _____ and ________ together  If you are a seller, how do you know how much to charge for your.

Chapter 4 Part 2. Supply Quantity supplied – amount of a good that sellers are willing and able to sell Law of supply – the quantity supplied of a good.

SUPPLY & DEMAND. Demand  Demand is the combination of desire, willingness and ability to buy a product. It is how much consumers are willing to purchase.

PPT accompaniment for the Consortium's Supply, Demand, and Market Equilibrium.

Chapter 6 Combining Supply and Demand. Equilibrium- where the supply and demand curves cross. Equilibrium determines the price and the quantity to be.

Combining Supply and Demand. Equilibrium Equilibrium is the point where supply and demand come together – Balance between price and quantity – The market.

Unit 2, Lesson 6 Supply and Demand and Market Equilibrium

Unit 2 Notes. Voluntary Exchange A market is created wherever a buyer and seller meet Both buyer and seller decide they are better off after the transaction.

Today’s Objectives Check Chapter 5 Homework Review Chapter 5 Homework Begin Chapter 6 Notes – Markets and Equilibrium You will… – Understand how to graph.

The Basics of Economics. Economic Activity Our economy, much like others around the world operate on a circular flow of economic activity. –Goods and.

Econ 2301 Dr. Jacobson Mr. Stuckey Week 3 Class 3.

Main Definitions Market: –All situations that link potential buyers and potential sellers are markets. Demand: –A demand schedule shows price and quantity.

Supply and Demand.  Voluntary exchange, agreeing on terms  Demand in economics, the different amounts we will purchase at various prices.  Market 

Supply and Demand Prices in a Free Market System.

Economic Perspectives. » DEMAND: The amount of goods/services consumers are willing & able to buy at various prices during a specified time period. »

Law of Demand ~ the amount of a product people will buy at different prices $20 $18 $16 $14 $12 $10 $8 $6 Demand Curve (D)

Supply and Demand A competitive market is a market in which there are   many buyers and sellers   of the same good or service. The supply and demand.

Demand and Supply Chapters 4, 5 and 6. Demand demand is a schedule that shows the various amounts of a product consumers are WILLING and ABLE to BUY at.

Intro To Microeconomics.  Cost is the money spent for the inputs used (e.g., labor, raw materials, transportation, energy) in producing a good or service.

Intro to Business Supply, Demand and Price Target: I can describe how costs and revenues affect profit and supply.

Supply and Demand Model AP Economics Ms. LaRosa. What would you be willing to buy? How many bags of your favorite candy would you be willing to buy at.

Chapter 7 Demand and Supply. Section 1 Demand The Marketplace  Consumers influence the price of goods in a market economy  Demand is how people decide.

Demand, Supply, and Market Equilibrium

Supply and Demand in a Market Economy

Demand, Supply, and Market Equilibrium

SUPPLY AND DEMAND: HOW MARKETS WORK.

Demand: Desire, ability, and willingness to buy a product

Supply Practice Problems

Marketing & Economic Principles

Factors that Shift Demand & Supply

Chapter 21 Supply and Demand Chapter 21

“Supply, Demand, and Market Equilibrium”

Presentation transcript:

Supply and Demand in a Market Economy

What is Supply and Demand? Supply = The amount of a good or service that a producer is willing & able to make available at a range of prices Demand = The want, willingness & ability to exchange a good/service I made a delicious pizza! WAHOOO!! WE’LL TAKE IT!!! *All other factors remaining constant!

Graphing Supply and Demand Economic charts are always graphed in this manner: Supply Demand D is for down Sup (S = up)

Balancing the Budget In order for buyers and sellers to be satisfied with a purchase, a balance must be made. Equilibrium Point = The quantity of a supplied good meets the demand! (both the buyer and seller are satisfied) My goal is to sell my pizza for as much money as people are willing to pay $1 is the perfect price for me! Any more and I’ll go eat something else. Looks like $1 is the perfect price!

Graphing Equilibrium Point Equilibrium Supply Point Demand

What Happens If… If the price of a good is too LOW, a shortage occurs If the price of a good is too HIGH, a surplus occurs. I should never have charged $50 per pizza…now NOBODY will buy my food and I have all these extra pizzas! Come and get it! Pizza for a nickel! We ALL want pizza since the price is so low! Oh no, I don’t have enough pizza for ALL these guys!

Graphing a Shortage Equilibrium Supply Point Demand

Graphing a Surplus Equilibrium Supply Point Demand

Price Relationships to Know: LAW OF DEMAND = INVERSE RELATIONSHIP LAW OF DEMAND = INVERSE RELATIONSHIP – Price increase = quantity demanded decrease – Price decrease = quantity demanded increase Ex: you go to the store for ice cream & it’s $1 a bar. You buy 10! You go back the next day, it’s $5 a bar….. WOAH! Now, you only buy 2 (your demand is less) LAW OF SUPPLY = DIRECT RELATIONSHIP LAW OF SUPPLY = DIRECT RELATIONSHIP *put your producer hat on!* – Price increase = quantity supplied increases – Price decrease = quantity supplied decreases Ex: I own a pizza place. Every other pizza place in Newtown just went from selling pizza for $10 to selling it for $20. Before people realize that’s RIDICULOUS – I want to stock up on as many pizzas as possible to sell (it’s not going to last). What does “law” mean ?

RECOGNIZE THE DIFFERENCE! A SHIFT in demand S S D D S S D D A SHIFT in supply A change in QUANTITY demanded S S D D A change in QUANTITY supplied

What Happens If… If there is an INCREASE in demand, the demand curve moves RIGHT. How do we reach a new Equilibrium Point? Equilibrium Supply Point D2 D1

What Happens If… If there is a DECREASE in demand, the demand curve moves LEFT. How do we reach a new Equilibrium Point? Equilibrium Supply Point D1 D2 The same is true for the Supply Curve! If there is an INCREASE in supply, the supply curve moves RIGHT. If there is a DECREASE in supply, the supply curve moves LEFT