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Aim: Does supply and demand determine the price of products?

Aim: Does supply and demand determine the price of products?. How to create supply and demand curves: Start off with a traditional graph. Create the supply curve by drawing an increasing line by going from left to right.

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Aim: Does supply and demand determine the price of products?

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  1. Aim: Does supply and demand determine the price of products? • How to create supply and demand curves: • Start off with a traditional graph. • Create the supply curve by drawing an increasing line by going from left to right. • Create the demand curve by drawing a downward sloping line from left to right. • The point of intersection is called the equilibrium. • This is the point where both amount of demand and amount of supply are at the most efficient levels.

  2. Aim: Does supply and demand determine the price of products?

  3. Aim: Does supply and demand determine the price of products? • Groups: • Each person will be the Group Leader for the scenario that is next to their name.

  4. Aim: Does supply and demand determine the price of products? • Scenario 1: The iPhone has received a new software upgrade that promises to increase security, protecting all the sensitive pictures and data of its users. This has come in the wake of a scandal, where the NSA is being suspected of spying on some US citizens. • Draw a graph that shows what it would look like if Apple were to sell 100,000 more iPhones after the upgrade was released. • What might be the new equilibrium price be now that the demand for iPhones has increased?

  5. Aim: Does supply and demand determine the price of products? • Scenario 2: The Toyota Camry has been recalled due to a problem with the airbag, causing them to deploy spontaneously, killing many drivers. • If Toyota was to sell about 400,000 Camry’s last year and sales went down by 50%, draw a graph that depicts this trend. • If Toyota was to replace their airbag supplier, what might this do to sales? • This new supplier can make airbags in the same amount of time, but it costs triple the amount because of safety regulations, lowering the supply of Camry’s in the marketplace. Could this help or hurt Toyota’s sales?

  6. Aim: Does supply and demand determine the price of products? • Scenario 3: The Idaho Potato company has purchased a new set of equipment that can harvest 25x more potatoes in the same amount of time as before, driving up the supply. • Since the supply is going up by such a drastic amount, what will this do to the price? • What are some suggestions that the company could use to help keep demand from falling too much and help keep their profits up? • Draw a supply and demand graph that could show the increase of the company’s supply.

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