Supply & Demand

As Supply decreases, Demand ___________

• Increases

• Decreases

• Stays the same

• Is not affected by Supply

As Supply increases, Demand ___________

• Increases

• Decreases

• Stays the same

• Is not affected by Supply

When Apple releases a new product and everyone is running to the stores to purchase the product, what financial term respects the condition of the Supply of products that are in high demand but low supply?

• Surplus

• Excess demand

• Shortage

• Equilibrium

When Casey’s ordered three extra crates of Pepsi products by accident and offers a Buy One Get One FREE promotion, what is the term for the underlying issue?

• Shortage

• Equilibrium

• Break Even

• Surplus

When there is a shortage of supply, and there is a high demand for a product, what happens to the PRICE of the product?

• It decreases

• It stays the same

• It increases

• Price is not affected by supply & demand

When there is a surplus of Christmas decorations at Walmart but a low demand for these products, what happens to the price of the products?

• The price decreases

• The price stays the same

• The price increases

• Price is not affected by supply & demand

Supply & Demand have what type of relationship?

• Similar relationship - they move in the same direction

• Opposing / Inverse relationship - they move in different directions

PRICE and Demand have what type of relationship?

When demand for a product increases, think about what happens to the price.

• Similar relationship - they move in the same direction

• Opposing / Inverse relationship - they move in different directions

PRICE and Supply have what type of relationship?

When supply for a product increases due to high demand, think about what happens to the price.

Also consider that if a business is making MORE of a certain product, what would they need to happen with the price?

• Similar relationship - they move in the same direction

• Opposing / Inverse relationship - they move in different directions

1 - When we are discussing SUPPLY, who are we talking about?

2 - When we are discussing DEMAND, who are we talking about?

• 1 - Businesses 2 - Buyers

• 1 - Buyers 2 - Businesses