ECONOMICSECONOMICSThe Supply & Demand The Supply & Demand

ModelModel

Presented by: Daniel L. SmithPresented by: Daniel L. Smith

ED 205 TR 10-11:15ED 205 TR 10-11:15

The Supply & Demand ModelThe Supply & Demand Model

SupplySupply DemandDemand Elastic DemandElastic Demand Inelastic DemandInelastic Demand EquilibriumEquilibrium

Quit

SupplySupply

The Law of Supply states that The Law of Supply states that quantity supplied is related to the quantity supplied is related to the price of a good or service. Therefore, price of a good or service. Therefore, the higher the price of a good or the higher the price of a good or service the more a producer will service the more a producer will produce of it making the supply produce of it making the supply curve upward sloping. curve upward sloping.

Supply CurveSupply CurveQuit

DemandDemand

The Law of Demand and The Law of Demand and the demand curve the demand curve represents the amount represents the amount of good and services of good and services that buyers are willing to that buyers are willing to purchase at various purchase at various prices, assuming all prices, assuming all other factors are other factors are constant. As prices constant. As prices decrease of a good decrease of a good consumers buy more consumers buy more making the demand making the demand curve downward sloping.curve downward sloping.

Demand Demand CurveCurve

Quit

Elastic DemandElastic Demand

Elastic Demand is the Elastic Demand is the percentage change in percentage change in one variable by the one variable by the percentage change in percentage change in another variable. By another variable. By this being done the this being done the demand for a good or demand for a good or service is more service is more elasticelastic meaning that there meaning that there ARE substitutes ARE substitutes allowing consumers to allowing consumers to pay less for the goods. pay less for the goods.

Elastic DemandElastic Demand

Quit

Inelastic DemandInelastic Demand

The Inelastic Demand curve is when The Inelastic Demand curve is when the quantity demanded does NOT the quantity demanded does NOT change much with a change in price. change much with a change in price. Therefore, some goods and services Therefore, some goods and services in which no substitutes are available in which no substitutes are available are generally inelastic. are generally inelastic.

Inelastic DemandInelastic Demand

Quit

EquilibriumEquilibrium

The Equilibrium of The Equilibrium of Supply and Demand Supply and Demand is where the quantity is where the quantity supplied equals the supplied equals the quantity demanded. quantity demanded. At the Equilibrium At the Equilibrium there is no tendency there is no tendency to change. The to change. The Equilibrium point is Equilibrium point is the the intersectionintersection of of Supply and Demand.Supply and Demand.

Equilibrium of Supply Equilibrium of Supply

& Demand& Demand

Quit

Try This!!!Try This!!!

Go to the web Go to the web address listed address listed below to test your below to test your knowledge of the knowledge of the concepts when it concepts when it comes to the comes to the Demand & Supply.Demand & Supply.

http://ecedweb.unohttp://ecedweb.unomaha.edu/Dem_Sumaha.edu/Dem_Sup/econqui2.htmp/econqui2.htm Quit

Supply & Demand CurveSupply & Demand Curve

As we have noticed, by examining As we have noticed, by examining the affects of both the supply curve the affects of both the supply curve and the demand curve, they are both and the demand curve, they are both related and or dependent upon each related and or dependent upon each other. If the supply of a good or other. If the supply of a good or service were to increase or decrease service were to increase or decrease it would affect the equilibrium point, it would affect the equilibrium point, which would in turn then affect the which would in turn then affect the price of the good or service.price of the good or service.

Quit

Supply & Demand VideoSupply & Demand Video

Click on the link below to view a video that will Click on the link below to view a video that will explain to you the reasons for the Supply and explain to you the reasons for the Supply and Demand curves and why they are shaped the Demand curves and why they are shaped the way they are. It will also discuss the affects of way they are. It will also discuss the affects of shifts on the curves which we will cover in the shifts on the curves which we will cover in the next unit so pay close attention!!!next unit so pay close attention!!!

http://http://www.youtube.com/watch?vwww.youtube.com/watch?v=qdOqAWo8vFw=qdOqAWo8vFw

Quit

How Demand & Supply Effects One How Demand & Supply Effects One AnotherAnother

With the ability of the With the ability of the demand for a partical demand for a partical good such as good such as saltsalt to to change, the price may change, the price may also change. Therefore, also change. Therefore, by consumers by consumers decreasing their decreasing their consumption of consumption of saltsalt the the producers will in turn producers will in turn decrease the supply of decrease the supply of it. This makes salt a it. This makes salt a product that has an product that has an inelastic demand. inelastic demand. Quit

Daniel L. SmithDaniel L. Smith

I am a Group Social I am a Group Social Studies Major at Studies Major at Grand Valley State Grand Valley State University. My University. My minor is in minor is in Economics and I Economics and I am the assistant am the assistant basketball coach at basketball coach at Allendale High Allendale High School. School.

Email me @Email me @dano5621@yahoo.comdano5621@yahoo.com

Quit

Concept Map of the Supply Concept Map of the Supply and Demand Modeland Demand Model

This is the wayThis is the way

That we developedThat we developed

Our supply and Our supply and

Demand Model.Demand Model.

Quit

ResourcesResources

Video of the Supply & Demand Model Video of the Supply & Demand Model http://www.youtube.com/watch?v=qhttp://www.youtube.com/watch?v=qdOqAWo8vFwdOqAWo8vFw

Quiz, “Exploring Supply & DemandQuiz, “Exploring Supply & Demand

http://ecedweb.unomaha.edu/Dem_Shttp://ecedweb.unomaha.edu/Dem_Sup/econqui2.htmup/econqui2.htm

Quit