Supply Demand Equilibrium Review

Supply, Demand, Equilibrium

Multiple Choice

Do your best...

The Law of Demand states that as price goes DOWN,

• demand goes down

• demand stays the same

• demand goes up

• supply goes up

Multiple Choice

Do your best:

The Law of supply states that as price goes DOWN,

• supply does up

• supply goes down

• demand goes down

• supply stays the same

Let's Watch This Clip

https://youtu.be/720uyg0Dd_M

In Summary: Law of Demand

• When price goes up, demand goes down.

• When price goes down, demand goes down.

• Demand is an INVERSE relationship.

In Summary: The Law of Supply

• When price goes up, supply goes up

• When price goes down, supply goes down

• It is a DIRECT relationship, price and supply

Demand Curves

As price goes up, quantity demanded goes up.

Supply Curves

As prices goes up, quantity supplied goes up.

Reasons for a shift in demand.

• Besides price, other factors can influence demand

• The graphic offers a few examples.

Reasons for a shift in supply.

Factors other than price.

Multiple Choice

If you know there is a sale on sneakers next week, what happens to your demand for sneakers THIS week?

• demand increases

• demand decreases

Multiple Choice

If sneakers are on the last chance clearance rack, that means that supply of those sneakers has

• increased

• decreased

Multiple Choice

If sneakers are on the last chance clearance rack, that means that demand of those sneakers has

• increased

• decreased

Multiple Choice

If you are the maker of embellished jean jackets, and the cost of sequins and fringe goes up, what will happen to your supply?

• It will increase

• It will decrease

Open Ended

Why did your supply decrease?

Multiple Choice

If you love orange cheddar cheese, but the price of white cheddar cheese goes down, what happens to your demand for orange cheddar cheese?

• It goes up because when price goes up, demand goes up

• It goes down because the price of a substitute good (white cheddar) went down.

• It goes up because as price stays the same, demand goes down.

Let's apply these concepts to a real thing.

What questions do you have before we start the documentary?