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Supply and Demand - PowerPoint PPT Presentation


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Supply and Demand. Supply. As the price of a good or service that producers are willing and able to offer for sale during a certain period of time rises (or falls), the quantity of that good or service supplied rises (or falls). . Demand.

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PowerPoint Slideshow about 'Supply and Demand' - josie


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Presentation Transcript
supply
Supply
  • As the price of a good or service that producers are willing and able to offer for sale during a certain period of time rises (or falls), the quantity of that good or service supplied rises (or falls).
demand
Demand
  • As the price of a good or service that consumers are willing and able to buy during a certain time period rises (or falls) the quantity of that good or service demanded falls (or rises).
slide4
Equilibrium- price at which the quantity demanded by buyers equals the quantity supplied by sellers
  • At this price every buyer finds a seller and every seller finds a buyer
slide5
Surplus- quantity supplied of a product exceeds the quantity demanded
  • Price of a product is above the market equilibrium price
slide6
Shortage- quantity demanded for a product exceeds the quantity supplied
  • Price of a product is below the market equilibrium price
hula hoops and silly bandz
Hula Hoops and Silly Bandz
  • www.youtube.com/watch?v=Ng3XHPdexNM
  • How does this video show the connection between supply and demand?
slide8
http://abcnews.go.com/Nightline/video/silly-bandz-latest-fad-11686769
  • www.usatoday.com/money/smallbusiness/2010-07-01-sillybandz01_CV_N.htm

How do these videos show the relationship between supply and demand?

slide9
What is the relationship between producers and consumers?

Prices are used in the market to help producers and consumers communicate with each other.

slide10
Changes in demand for consumer products can shift tremendously over short time periods.
  • Video clips show how prices are changed in response to demand.
slide11
Prices will rise or fall based on the supply and demand for goods and services.
  • The change in demand for Hula Hoops initially decreased the price due to the lack of demand.
slide12
Demand skyrocketed for Hula Hoops and led to a large increase in the price level- consumers wanted to buy and were willing and able to pay more for the toy.
slide13
Silly Bandz- producer was sensitive to the idea of raising the price for the product- part of the marketing strategy was to be a cheap alternative to video games and other expensive toys
slide14
If there is an unwillingness to raise prices, excess demand can only be met with increasing the supply- includes substitute brands entering the market and gathering market share.
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