Starter

1. Starter • What is the law of supply?

2. Supply And Demand The students will learn about the relationship between supply and demand. You will also learn about price.

3. Supply and Demand • Supply and demand work together to set prices • The point where demand & supply are balanced is called the Equilibrium Price

4. Surplus is the amount supplied higher than amount demanded. Surplus means the price is too high. • Shortage is the amount by which the quantity demanded is higher than quantity supplied. A shortage means that the price is too low.

5. A price ceiling is government set maximum price that can be charged for a good or service. • A price floor is government set minimum price that can be charged for a good or service

6. Price • Price helps businesses and consumers make decisions. • Price affects what gets produced, how it is produced, & for whom it is produced. • Price favors neither consumer or producer. It is a compromise between the two. • Prices are flexible. They adjust to changes in supply and demand

7. Supply and DemandGraph the demand and supply schedule located below

8. Graph Questions • What is the equilibrium price? • How does the price affect demand? Supply? • What would happen to the demand curve if I gave everyone extra credit for buying a doughnut? • What would happen to the supply if the price of sugar suddenly increased due to a shortage, so that five fewer doughnuts were supplied ate every price? • Name three factors other that price that affects demand for a product? • Name three factors other that price that affects supply for a product? • How is price changed by changes in either supply or demand