1. When Supply Meets Demand

2. S CS PF P1 P PC D D1 Q Q1 Prices of Apples Quantity in tons of Apples
The federal governments price floor is set above the market price. As a result. Sellers will be willing to sell more and buyers will be willing to buy less. This results in a surplus of apples. S CS
Surplus PF P1 P
Prices of Apples
The federal governments price ceiling is set below the market price. As a result, buyers demand more at the lower price, and sellers are willing to sell less at the lower price. This results in a shortage of apples. PC
Shortage D D1 Q Q1
Quantity in tons of Apples

3. Assume you go into a store and buy a pack of delicious French Onion flavored Sun Chips. The chips cost you $ You love them so much you would have been willing to $2.00. The difference between what you paid and what you would have been willing to pay is consumer surplus (CS). At this price you got a good deal!
Why is consumer surplus important? When markets create consumer surplus, many consumers buy the good for less than they would be willing to pay. Consumers like this because they are getting a deal!
Producers dislike it because they know some people would be willing to pay more.
Ex. Shoes at Nordstrom's
Buying a used car

4. *If the price consumers pay increases, consumer surplus decreases
.45
Why is consumer surplus important? When markets create consumer surplus, many consumers buy the good for less than they would be willing to pay. Consumers like this because they are getting a deal!
Producers dislike it because they know some people would be willing to pay more.
Ex. Shoes at Nordstroms
Buying a used car
.40 P
.35
.30
.25
.20
.15 D 50
100
150
200
250
Q (in millions)

5. S CS PF P1 P PC D D1 Q Q1 Prices of Apples Quantity in tons of Apples
Surplus PF P1 P
Prices of Apples PC
Shortage D D1 Q Q1
Quantity in tons of Apples

6. Now you Try…
Use the information you just learned to see how supply and demand works with gumballs. First plot your graph given the information. (1-7) Next answer the questions on your worksheet. (A-E) Higher-Order Thinking Question: Finally, create your own scenario. In your scenario, explain the aspects of demands and price floors and ceilings.

7. Let’s Go to School
You have just been given a packet that contains 5 different documents. You will analyze each document and answer the questions listed in the packet.
We will discuss the final portion of the assignment together!
-I will model Document A.
-We will do Document B together.
-The finally 3 documents will be done individually.

8. Homework Assignment Individually: The written portion will:
You will research the college of your choice.
Find the tuition for the year.
Find the tuition for the year.
Consider your research & the documents before you answer the prompt.
Answer the prompt and cite at least 3 documents.
The written portion will:
Be at least 1-page.
Answer all components of the prompt.
3) Parenthetically cite at least three documents.