Wednesday, May 20, 2009

Economics - Supply and Demand

In class (as you might know already) we are studying sustainability and part of sustainability is economics and for economics we are studying supply and demand. We have looked at a few graph like the one above and on each graph there is and equilibrium point which is where the price and quantity meet. The price goes up when there is a high demand and low quantity (example: "There are shoes on the market but we can't afford them."). But the producer will lower the price if there is a high demand and a high quantity and then the consumer is more likely to buy (example: "Here are some shoes and we can afford them. Lets by them.") .

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You might find more about the relationship between supply and demand.

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