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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

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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

Supply and Demand

VISUALIZING DEMAND AND SUPPLY 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.

How many CDs will be demanded at $16 a piece?

How many CDs will be supplied at $18 a piece?

Let’s visualize Supply and Demand

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

Supply and Demand video

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 demand

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.

Let’s Graph the Supply

Supply and demand Activity - soda

What is the equilibrium $ for soda?

Quantity

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https://www.youtube.com/watch?v=RP0j3Lnlazs

Supply and Demand video