Supply and demand- definitions and their relationship

Contributed by:

Steve Fri, Jan 21, 2022 04:42 PM UTC

This booklet covers the basics of supply and demand. It also depicts their relationship with each other.

1. Supply and
Demand
CO: I can justify my answer using reasoning.

2. What is supply?
Supply is how much of something • If there is a lot of an ítem we say
there is. it has a high supply.
• If there is not a lot of an ítem we
say it is in low supply.

3. What is demand?
Demand is how many people want • If a lot of people want an ítem
an ítem at a particular time. then we say it has high demand.
• If not a lot of people want a ítem
we say it has low demand.

4. High Supply & Low Demand Low supply & High Demand
In this situation, there is a lot of a In this situation, there is not a lot of
good but not a lot of people want it. an item, but a lot of people want it.
For example, it is Fall and there are a For example, the makers of Minecraft
lot of pumpkin things. McDonald’s just released a limited edition game.
decides maybe people would like a Walmart just got the shipment in of
pumpkin burger so they make a lot of 200 games. They have to wait a
them. When people hear of it they couple weeks before more games are
think it sounds disgusting so nobody made and come in. Over 1,000 people
wants them. This is high supply (a lot show up to buy the new game. This is
of pumpkin burgers) and low demand low supply (only 200 games) and high
(not a lot of people want them). demand (over 1,000 people want it
and there isn’t enough).

5. This is a high supply and low demand situation because
This is a low supply and high demand situation because

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