This document introduces the concepts of supply and demand in economics, defining supply as the quantity producers are willing to sell and demand as the quantity consumers are willing to buy at various prices. It explains the laws of demand and supply, illustrating their principles with downward and upward-sloping curves, respectively, and discusses market equilibrium where quantity demanded equals quantity supplied. Additionally, it highlights factors that can shift supply and demand, along with real-world examples of their applications.

1. SUPPLY AND DEMAND
Economics class

2. Introduction to Supply and
Demand
Understanding Supply and Demand in
Economics
 Definition of Supply and Demand:
 Supply: The quantity of a good or service that
producers are willing and able to sell at various
prices over a period of time.
 Demand: The quantity of a good or service that
consumers are willing and able to purchase at
various prices over a period of time.

3. The Law of Demand
 Principle: As the price of a good or service
decreases, the quantity demanded increases,
and vice versa, ceteris paribus (all else being
equal).
 Demand Curve: Downward-sloping curve on
a graph where the y-axis represents price and
the x-axis represents quantity.

4. The Law of Supply
 Principle: As the price of a good or service
increases, the quantity supplied increases,
and vice versa, ceteris paribus.
 Supply Curve: Upward-sloping curve on a
graph where the y-axis represents price and
the x-axis represents quantity.

5. Market Equilibrium
 Equilibrium Point: The point at which the
quantity demanded equals the quantity
supplied.
 Equilibrium Price and Quantity: The price
and quantity at which the market is in balance,
and there is no tendency for change.

6. Shifts in Demand and Supply
 Factors Causing Shifts in Demand:Changes in
consumer preferences
 Income levels
 Prices of related goods (substitutes and
complements)
 Expectations of future prices
 Factors Causing Shifts in Supply:
 Production technology
 Input prices
 Number of sellers
 Expectations of future prices

7. Real-World Examples and
Applications
 Example 1: The impact of technological
advancements on the supply of smartphones.
 Example 2: The effect of seasonal changes
on the demand for heating oil.
 Example 3: Government policies, like taxes
and subsidies, affecting supply and demand
dynamics.