Transcript Supply and Demand

Supply and Demand
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.
The Supply Curve
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.

The Demand Curve
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.

Supply and Demand Curves
Today’s Assignment:
1.
Define and give an example of: Mass
Production (see p.13 of text)
2.
Draw a basic supply and demand curve chart
(see p.13) for an example of your choice.
3.
Read p. 14 and answer p.14 # 1 - 3