 How much is a football superstar
such as Tom Brady, Eli Manning
and Victor Cruz paid compared to
an average player?
 Which costs more, diamonds or
gravel?
 Explain both answers
Supply and Demand
Consumer a person who buys and
uses goods and services
Producer is an individual or
organization that determine what
products and services will be
available.
Supply and Demand
Price is the amount of money given or
asked for when goods and services
are bought or sold.
Supply and Demand
Demand is the amount or quantity of
goods and services that consumers
are willing to buy at various prices.
Supply and Demand
The higher the price, the fewer
consumers will buy an item.
The lower the price, the more
consumers will buy an item.
Supply and Demand
Supply is the amount of goods and
services that producers will provide at
various prices.
Supply and Demand
Demand and supply work together.
When the quantity demanded and the
quantity supplied meet, the price is
called the equilibrium price or
market price
Let’s visualize Supply and Demand
VISUALIZING DEMAND AND SUPPLY
How many CDs will be
demanded at $16 a piece?
How many CDs will be
supplied at $18 a piece?
Remember these
two points: (1) The
demand curve
always falls left to
right on a graph, and
(2) the supply curve
always rises from
left to right on the
graph.
 Watch this clip from The Hudsucker Proxy and discuss how
the supply and demand for Hula Hoops interacted with
prices
 Why does a business owner lower the price of products that
are not selling quickly?
 When would a business owner have the incentive to raise
prices?
 What does a higher price than before for a good or service
communicate to consumers about the demand for that
product?
https://www.youtube.com/watch?v=Ng3XHPdexNM
Let’s Graph the demand
Let's assume that at 40 cents a bottle
students demand 100 bottles of soda
(pop). At $1.00 a bottle, students,
demand 75 bottles. At $2.00 a bottle,
students demand 30 bottles. At $5.00 a
bottle, students demand 2 bottles.
Place this data on the graph
Let’s Graph the Supply
Let's assume that at 40 cents a bottle,
suppliers would provide no soda. At
$1.00 a bottle, supplies would provide
75 bottles. At $2.00 a bottle, suppliers
would provide 250 bottles. At $5.00 a
bottle, suppliers would provide 500
bottles. Place this data on the graph.
Price
Supply and demand Activity - soda
Quantity
What is the equilibrium $ for soda?
Supply and Demand video
https://www.youtube.com/watch?v=RP0j3Lnlazs