1. How does the price of an item affect the demand?
Review Supply and Demand Goal 6 Examine how supply and demand affects prices in the marketplace
How does the price of an item affect the demand?

2. I: The Law of Demand
A: Demand is the desire to own something and the ability to pay for it.
B: The law of demand says that when a good’s price is lower, consumers will buy more of it. When the price is higher , consumers will buy less of it.
C: Market demand: the total demand of all consumers for their product or service.

3. D: Changes in Demand Increase or decrease in income Population change
Changes in consumer preferences (tastes)
Expectations
Change in related products-Complements
Change in related products-Substitutes
A change in any of these areas will cause demand to increase or decrease and the demand curve to shift right (increase) or shift left (decrease)

4. II:Supply and the Supply Curve
I: The Law of Supply
A: Supply is the amount of goods available.
B: According to the Law of Supply, the higher the prices, the larger the quantity produced. As the price falls, quantity supplied falls. (If the price is high, there’s too much supply).
C: The total of all supply schedules for businesses that provide the same goods or service is called the market supply.

5. III: Changes in Supply Productivity Technology Government Policies
Taxes
Subsidy
Cost of Resources
Expectations
Number of Suppliers
Unforeseen event
If supply increases the supply curve shifts right and if supply decreases the supply curve shifts left.

6. IV: Balancing the Market
I: Combining Supply and Demand is how the market balances.
A: Defining Equilibrium
1. The point where demand and supply come together.
2. equilibrium is the point of balance between price and quantity.
3. Supply = Producer
4. Demand = Consumer
5. Equilibrium = win win for both C&P