# Imagine you sell computers… A Lenovo Laptop has a price tag of \$800, but no one is buying it. What do you do? Why?

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Imagine you sell computers… A Lenovo Laptop has a price tag of \$800, but no one is buying it. What do you do? Why?

Objective: Explain and graph shortages, surpluses, and equilibrium prices; analyze market prices Guiding Question: How can buyers get the best possible deal and sellers still make the most money possible?

Imagine that a new type of digital camera hits the marketplace. At \$125, producers supply a large number of cameras, but only half are sold. The next week, the price is reduced to \$85, and the cameras are all gone in the middle of the week with people asking for more. The following week, the price is increased to \$105 and almost all the cameras that were supplied are sold. At \$125, there was a surplus of cameras At \$105 per camera, the market was in equilibrium At \$85 there was a shortage

 A surplus occurs when the quantity supplied is more than the quantity demanded (Qs > Qd)  When there is a surplus: lower price \$75 100200 What is the Qs when iPods are \$75? What about the Qd?

 A shortage happens when the quantity supplied is less than the quantity demanded (Qs < Qd)  When there is a shortage: you can raise the price \$25 100200 What is the Qs when iPods are \$25? What is the Qd?

 Equilibrium is the condition when the quantity supplied equals the quantity demanded (Qs = Qd)  Equilibrium is like a magnet, there is always pressure to move to this point Sellers want to sell iPods for \$50 because they can sell more and buyers like it because it is cheaper

 Quantity Supplied is 400, Quantity Demanded is 200  Quantity Supplied is 150, Quantity Demanded is 200  Quantity Supplied is 75, Quantity Demanded is 75  Quantity Demanded is 200, Quantity Supplied is 140  Quantity Supplied is 15, Quantity Demanded is 10 Surplus of 200 Equilibrium Shortage of 50 Shortage of 140 Surplus of Five

DEMAND SCHEDULE PriceQd \$15400 \$20325 \$25250 \$30175 \$35 SUPPLY SCHEDULE PriceQs \$15300 \$20330 \$25360 \$30390 \$35 Use the supply and demand schedules above to create one demand curve showing both data-sets. Remember your labels! Challenge: figure out the mathematical sequence in each schedule and add the final answer to your graph. (When the price is \$35, what is the supply? The demand?)

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