The law of supply and demand states that “that in a competitive free market, the price for a good will move towards the level where supply and demand for that good are equal.
The law of supply: states that producers offer more products for sale when it’s a higher price rather than at lower price. As the supply increases the price also increases and when supplies decrease price will decrease.
The law of demand: states that consumers will purchase more of a product at a lower price than at a higher price, and when there is more demand there is less quanity of the product.
The Equilibrium: Is the line where supply and demand are equal. There is a surplus of supply when price is over the equilibrium and a shortage of supply when the price is below it.
The supply and demand graph shows the price and the quantity of the object being sold in the market place.
A example of this would be the Tickle Me Elmo because it had such a high demand but there were not enough, so the prices increased. Another example is when a grocery store has a product that no one buys the quantity increases and the demand is lowered.
The law of supply: states that producers offer more products for sale when it’s a higher price rather than at lower price. As the supply increases the price also increases and when supplies decrease price will decrease.
The law of demand: states that consumers will purchase more of a product at a lower price than at a higher price, and when there is more demand there is less quanity of the product.
The Equilibrium: Is the line where supply and demand are equal. There is a surplus of supply when price is over the equilibrium and a shortage of supply when the price is below it.
A example of this would be the Tickle Me Elmo because it had such a high demand but there were not enough, so the prices increased. Another example is when a grocery store has a product that no one buys the quantity increases and the demand is lowered.
Created by BFREEL
http://en.wikipedia.org/wiki/Equilibrium
http://en.wikipedia.org/wiki/Law_of_supply_and_demand
http://www.curriculumlink.org/econ/materials/sdlaws.html
http://en.wikipedia.org/wiki/Supply_and_demand