1. Warm Up
Explain the law of supply

2. Thursday, October 29, 2015
Objective: Students will be able to understand the effect of changes in price on the quantity demanded and quantity supplied.
Purpose: Supply and demand are the two things that determine market price.

3. Equilibrium
Equilibrium: the point at which the quantity demanded is equal to the quantity supplied
At equilibrium, the market price of a good is stable
At the equilibrium price, buyers will purchase exactly as much of a good as firms are willing to sell

4. Supply and Demand on the Same Graph
X-axis = quantity
Y-axis = price
Equilibrium: located where the supply and demand curves cross

5. Shortage
Shortage: situation in which the quantity supplied is less than the quantity demanded
As a result of a shortage, prices will rise
Quantity supplied is less than the quantity demanded

6. Surplus
Surplus: situation in which the quantity supplied is greater than the quantity demanded
As a result of a surplus, prices will fall
Quantity supplied is less than the quantity demanded

7. Changes to Prices Prices change because... Supply changes
Demand changes
Supply AND demand change

8. If Supply decreases…

9. If Supply increases…

10. If Demand increases…

11. If Demand decreases…

12. Practice Worksheet
Each student is to complete the supply/demand graphing worksheet on their own.
Use your knowledge gained from today’s lesson and your knowledge about shifts in supply and demand to complete the worksheet.
When you are finished with the worksheet, hand it in to me.