Transcript Supply and Demand

Supply and Demand Objectives



Will have definitions
of supply and demand
terms.
Will have defintions
of equilibrium points,
surplus, and
shortages.
Will be able to apply
the terms in
examples.
Motivation


Auction off a soda
at various prices.
Discuss the
relationship
between the price
and the quantity
demanded.
Demand Schedule
a
listing of the quantities that
would be purchased at
various prices.
Demand Curve
a
graph illustrating the
relationship between the
price and the quantity
purchased at each price.
Demand
 the
quantity of goods and
services that consumers are
willing and able to purchase
at various prices.
Quantity Demand
 the
quantity of goods and
services that consumers are
willing and able to purchase
at one given price.
Law of Demand

As the price
increases, the
quantity demand
decreases, OR as
the price
decreases, the
quantity demand
increases.
Diminishing Marginal Utility
 The
principle that as
additional units of a product
are consumed during a given
time period, the additional
satisfaction decreases.
Diminishing Marginal Utility
Application

Work or
Play?
Handout.
Supply Schedule
a
listing of the quantities that
would be supplied at various
prices.
Supply Curve
a
graph illustrating the
relationship between the
price and the quantity
supplied at each price.
Supply
 the
quantity of goods and
services that a firm is willing
and able to make available
for sale at various prices.
Quantity Supply
 the
quantity of goods and
services that a firm is willing
and able to make available
for sale at one given price.
Law of Supply
 As
the price increases, the
quantity supply increases,
OR as the price decreases,
the quantity supply
decreases.
Equilibrium Point

The price
(equilibrium price)
at which the
quantity demanded
equals the quantity
supplied
(equilibrium
quantity).
Shortage

the condition in
which the
quantity
demanded is
greater than the
quantity supplied
at a given price.
Surplus

the condition in
which the
quantity supplied
is greater than
the quantity
demanded at a
given price.