Supply and Demand

1. Supply and Demand

2. Supply and Demand • Supply – amount of goods/services available to buy • Demand – the amount of a good/service consumers are willing to buy

3. Supply and Demand Curve

4. Demand • The quantity of a good or service that consumers are willing and able to but at a specific price • Every consumer has different demands • As the price of a good or service increases, the demand will drop • The opposite is also true

5. Conditions that create demand • Awareness of product/service • Ample supply • Reasonable and competitive prices • Accessibility

6. Factors that Affect Demand • Change in consumer income • Change in consumer tastes • Change in the expectations of future conditions • Change in population

7. Supply • The quantity of a good or service that businesses are willing and able to provide within a range of prices people are willing to pay • As the prices increase, suppliers are more willing to offer more products/services

8. Conditions that affect supply • A change in the number of producers of the product/service • The price of the related goods • A change in technology • A change in expectations • A change in the costs of production

9. Price • Determined by many factors, including supply and demand • Prices tend to fluctuate because demand and supply are constantly changing • Price is also influenced by the cost of producing the good or service • Competition also influences price