1. Supply and Demand 101

2. A basic supply and demand curve The vertical axis is PRICEThe vertical axis is PRICE The horizontal axis is QUANTITYThe horizontal axis is QUANTITY The Demand curve slopes down and to the rightThe Demand curve slopes down and to the right The supply curve slopes up and to the rightThe supply curve slopes up and to the right

3. A basic supply and demand curve

4. Law of Demand The price goes up demand goes downThe price goes up demand goes down The price goes down demand goes upThe price goes down demand goes up Price and demand have an inverse relationshipPrice and demand have an inverse relationship

5. Change in quantity demanded All this means, is there is a price changeAll this means, is there is a price change All the movement is along the existing demand curveAll the movement is along the existing demand curve

6. Change in quantity demanded

7. Change in demand All this means, is a variable has been introducedAll this means, is a variable has been introduced The old demand curve no longer applies and we have to draw a new oneThe old demand curve no longer applies and we have to draw a new one

8. Change in demand Demand Increase Demand Decrease

9. Examples of variables in demand

10. Population increase

11. Kroger More people in Sunbury means more grocery salesMore people in Sunbury means more grocery sales Kroger comes hereKroger comes here

12. Income

13. Income As more people lose jobs, their ability to buy things declinesAs more people lose jobs, their ability to buy things declines

14. Tastes and preferences

15. Short Shorts The demand for short basketball shorts could not be lowerThe demand for short basketball shorts could not be lower

16. Substitution effect

17. Substitution Effect 2 similar products2 similar products The price of one changes, it will effect the demand for the otherThe price of one changes, it will effect the demand for the other The graph to the right represents the demand for Burger King after McDonalds raised pricesThe graph to the right represents the demand for Burger King after McDonalds raised prices Burger King

18. Complimentary good

19. 2 products that go together like PBJ2 products that go together like PBJ The graph represents the demand for jelly if the price of peanut butter goes upThe graph represents the demand for jelly if the price of peanut butter goes up Jelly

20. Law of supply The price goes up supply goes upThe price goes up supply goes up The price goes down supply goes downThe price goes down supply goes down Supply and price have a direct relationshipSupply and price have a direct relationship They move in the same directionThey move in the same direction

21. Law of supply we all have our price

22. Change in quantity supplied All this means, is there is a price changeAll this means, is there is a price change All the movement is along the existing supply curveAll the movement is along the existing supply curve

23. Change in quantity supplied

24. Change in Supply All this means, is a variable has been introducedAll this means, is a variable has been introduced The old supply curve no longer applies and we have to draw a new oneThe old supply curve no longer applies and we have to draw a new one

25. Change in supply Increase in Supply Decrease in Supply

26. Examples of variables in supply

27. Price of inputs

28. Supply of anything that must transport a product Inputs are raw materials used in productionInputs are raw materials used in production When they increase, firms cannot supply as many products at any given priceWhen they increase, firms cannot supply as many products at any given price The graph shows the negative effects of higher gas pricesThe graph shows the negative effects of higher gas prices

29. Technology improvement

30. Supply of Books Improvements in technology improves productivityImprovements in technology improves productivity The kindle makes it cheaper to produce booksThe kindle makes it cheaper to produce books The graph shows the positive effectThe graph shows the positive effect

31. Taxes government regulations

32. Auto Industry Government regulations may protect the consumer, but they make it more expensive to produce thingsGovernment regulations may protect the consumer, but they make it more expensive to produce things The graph shows the effect of forcing the auto industry to include air bagsThe graph shows the effect of forcing the auto industry to include air bags