Introduction to Supply
and Demand
Windy Mulder
Horizon Middle School
Happy Friday!
 Please write today’s agenda in your
planner
 Warm up:
 Read the article about the butter
shortage in Japan. Then answer
this question in the warm up
section of your binder:
 Why are dairy producers less
motivated to produce butter?
Video and Questions
 Hula Hoop video clip
 Think about these questions as you watch the
video:
1.
Why does a business owner lower the price of a
product that is not selling quickly?
2.
When would a business owner have the
incentive to raise prices?
3.
What does the rising price of a good or service
tell consumers about the demand for that
product?
Vocabulary
MARKET ECONOMY
Economic system in which there
is free competition and prices
are determined by the
interaction of supply and
demand
SUPPLY
The quantity(amount) of the
demanded item at a
particular price
SURPLUS
When the supply
exceeds the demand
SHORTAGE
When there is more
demand for an item than
there is available supply
CONSUMER
Person who buys or uses
a good or service
PRODUCER
Someone who makes a
good or provides a
service
GOODS
Inherently useful and
relatively scarce tangible
items
SERVICES
Intangible products that
are provided by
someone to another in
exchange for payment
Closure
 Auction
 Class Debrief
 What happened when the demand for the item was
high?
 What was the incentive to raise the price?
 What does the rising cost of the good tell consumers
about the demand for the product?