1. Supply and Demand

2. Supply
Is how much of a good or service a producer is willing to produce at different prices.
Eg. You own a lawn-mowing service.
At a rate of $10/hr, you’re willing to spend 8 hours/week mowing lawns.
If your neighbours are willing to pay $1/hr, you may decide not to bother mowing lawns at all.
If the rate for lawn mowing rose to $50/hr, you would probably want to increase the number of lawns you would cut.

3. The Supply Curve

4. Demand
Is an individual’s need or desire for a product or service at a given price.
Eg. You are interested in having someone cut your grass for you in the summer.
At $10/hr, you figure it’s worth having someone come and do this every 2 weeks.
If the rate went to $5/hr, you may be willing to have someone come and do this every week.

5. The Demand Curve

6. When Supply meets Demand
The point at which the supply and demand curves meet is what is known as the equilibrium price and quantity.
This is the price at which supply equals demand.

7. Supply and Demand Curves

8. Today’s Assignment:
Define and give an example of: Mass Production (see p.13 of text)
Draw a basic supply and demand curve chart (see p.13) for an example of your choice.
Read p. 14 and answer p.14 # 1 - 3