Supply & Demand

A bakery only has 10 chocolate cakes left, but 40 customers want to buy them. What will most likely happen to the price of the cakes?

• The price will stay the same.

• The price will go down.

• The price will go up because demand is greater than supply.

• The price will go up because supply is greater than demand.

According to the passage, what happens when lots of people want the same thing but there isn’t enough for everyone?

• Prices go down

• Prices stay the same

• Prices go up

• People lose interest

When demand is greater than supply, ______ go up.

• prices

• sales

• discounts

• taxes

When there are only a few cakes left and many people want them, people are willing to pay more to get one.

• True

• False

A new smartwatch is released with limited stock. People are lining up outside the store overnight to get one. What will most likely happen to the price?

• The price will fall quickly.

• The price will rise because demand is much higher than supply.

• The price will fall because demand is lower than supply.

• Prices are random and not influenced by demand.

Which of the following best describes the economic definition of demand?

• Demand is the same as wanting something.

• Demand refers to the amount of a good or service that consumers are both willing and able to purchase at a given price.

• Demand is only about luxury items.

• Demand is created by advertising.

What happens when the price of a good, like an iPhone, decreases?

• The entire demand curve shifts.

• The quantity demanded increases, but the demand curve does not shift.

• The demand for all goods increases.

• The demand curve shifts due to price change.

Which statement about supply is correct?

• A) Supply is just the number of products a company has.

• B) Supply is the amount of a good or service that producers are willing and able to sell at a given price.

• C) Supply is only about current inventory.

• D) Supply does not depend on price.

Why will the price rise according to the passage?

• Because supply is much higher than demand

• Because demand is much higher than supply

• Because there are too many sellers

• Because prices are always high

Fill in the blank: Too many buyers + too few smartwatches = ______ prices.

• higher

• lower

• stable

• discounted