1. Objective: Identify how supply and demand impact price

2. 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.

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

4. 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

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

6. 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

7. Identify Equilibrium Price

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

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

10. Identify Shortage & Surplus