1. Supply and Demand Article 1.How would you feel as a customer if you knew that Coke charged more money for a soda from vending machines when it was warmer outside? Explain. 2.What happened when coke suggested changing the price for a soda on a hot day? 3.Why are other industries able to do this according to the article? What are some examples it mentions?

2. Cost to ProduceAmount of SupplySupply Curve Shifts Cost of sugar, flour, and jelly decreases Cost of sugar, flour, and jelly increases Workers become less productive Factory workers become more productive New machine is invited to produce doughnuts faster Government passes strict doughnuts health regulations Lower Taxes Government Pays Subsidy Warm Up- Copy Chart in notes and complete with arrows; Supply chart based on jelly doughnuts

3. Supply and Demand Together

4. Review of Supply and Demand Demand- the desire to own something and the ability to pay for it The Law of Demand- PDPDPDPD Supply- the amount of goods or services available The Law of Supply- PSPSPSPS

5. Supply and Demand Together

6. Equilibrium Equilibrium- the point at which quantity demanded and quantity supplied are equal At a point of equilibrium- – the price and quantity are balanced – the market for a good/service is stable

7. Complete the Practice Graph on your sheet!

8. Supply and Demand Together Price of CD’sQuantity Demanded Quantity Supplied $5.0010010 $10.008020 $15.0030 $20.002080 $25.0010100

9. Disequilibrium Disequilibrium- any price or quantity not at equilibrium Shortage- (AKA Excess Demand) when quantity demanded is more than quantity supplied

10. Disequilibrium continued… Surplus- (AKA Excess Supply) when quantity supplied is more than quantity demanded

11. Shifting Supply and Demand A shift in the demand curve or the supply curve will result in a new equilibrium price

12. Price Controls Price Ceiling- a maximum price that can be legally charged for a good or service – example: rent control Price Floor- a minimum price for a good or service – example: minimum wage

13. Inflation and Deflation Inflation- a general increase in prices (over the years, prices rise and fall, but in the American economy, they have mostly risen) Deflation- A substantial drop in the prices