Consumer Supply & Demand Textbook p P 13 the people who use goods and services The USA has a FREE ENTERPRISE or Market Economy In a free enterprise/market economy, the consumer helps decide what will be produced and what the price will be. Competition the rivalry among businesses to sell goods to consumers and make the greatest profit. Profit the money left over for the seller after the costs of production have been paid.

If the supply is high, there will be less competition for the product – so it will be cheaper. Think PENCILS at school If the supply is low, the competition will be fierce, so the seller can boost up the price and people will pay if they really want it badly enough. Think of the XBOX at Chrismas time last year

SUPPLY HIGH = PRICE LOW SUPPLY LOW = PRICE HIGH

DEMAND Demand is the amount of people who want an item. Think answer keys to a test If lots and lots of people want something (demand is high) then the price goes up. If no one wants the item (demand is low) then the price goes down. Think cleaner for computer screen

Demand High = Price High Demand Low = Price Low