1. Supply and Demand

2. What is supply?

3. Supply and Demand ▸ Supply- quantity of a product or service that sellers are willing and able to provide the market at a given price

4. Supply and Demand Importance of understanding supply ▸ For better understanding of changing prices ▸ Supply influences price

5. Supply and Demand Causes for changes in supply ▸ Changes in production costs ▸ Prices of related goods ▸ Number of sellers in the market ▸ Future expectations of price ▸ Past performances of price

6. Supply and Demand Law of Supply ▸ Relationship between product supply and price

7. Supply and Demand Supply is not just a single product at a single price!

8. Supply and Demand What is demand?

9. Supply and Demand ▸ Demand- quantity of a product or service that buyers are able and willing to purchase from the market at a single price

10. Supply and Demand Factors influencing demand ▸ Changes in personal income ▸ Prices of related goods ▸ Number of buyers in the market ▸ Future expectations of price ▸ Past performances of price

11. Supply and Demand Law of Demand ▸ Low prices = More buyers ▸ High Prices = Fewer buyers

12. Supply and Demand Establishing Price Through supply and demand price can be established.

13. Supply and Demand Equilibrium price Definition: quantity supplied equals quantity demanded

14. Supply and Demand Equilibrium price=market price

15. Supply and Demand ▸ Complementary ▸ Supplementary ▸ Elastic vs. Inelastic

16. Supply and Demand Complementary - Definition ▸ If an increase in the price of one product decreases the consumption of another

17. Supply and Demand Complementary ▸ Products that are eaten and/or promoted together ▹ Examples: ham and eggs, lettuce and salad dressing

18. Supply and Demand What is Supplementary?

19. Supply and Demand Supplementary - Definition ▸ A product that does not compete with another product

20. Supply and Demand Supplementary - Definition ▸ Products that do not compete with other products ▹ Examples: sheep and wheat production

21. Supply and Demand What is Elastic and Inelastic?

22. Supply and Demand Elastic - Definition ▸ Demand of a product whose use is not directed by necessity or habit, therefore has several substitutes

23. Supply and Demand Elastic ▸ Causes consumers to be more cautious of price changes ▹ Examples: T-bone steaks

24. Supply and Demand So what is Inelastic?

25. Supply and Demand Inelastic - Definition ▸ Products that have a necessity and very few substitutes

26. Supply and Demand Inelastic ▸ Consumers must have these items and are insensitive to price changes ▹ Examples: bread, milk

27. ...and we’re done!