Supply and Demand
Supply
oThe amount of a good or
service for sale at a
particular price and at a
certain time
Demand
oThe ability and willingness
of people to buy
something
Law of supply/ Law of demand
oLaw of supply- as prices go up,
producers are willing to
produce more
oLaw of demand- as prices go
up, people demand less
o http://www.investopedia.com/universit
y/economics/economics3.asp
Equilibrium Point
oThe price at which supply
equals demand and there
is neither scarcity nor
surplus
Surplus
oA condition in which there
are more goods or services
available than there is
demand for them
Shortage
oA condition in which there
are too few goods or
services to meet the
demand
Price
oThe value of a good or
service in money
Demand, Supply, & Price
o When demand increases, and supply
remains the same: then price
increases
o When demand decreases, and
supply remains the same: the price
decreases
o When demand remains the same,
and supply increases: the price
decreases
o When demand remains the same,
and supply decreases: then price
increases