The document discusses supply and demand from the perspective of both businesses and consumers. It defines supply as the amount producers are willing to supply at a given price, and demand as the amount consumers are willing to buy at a given price. Equilibrium occurs when supply and demand are equal. The document provides an example of a farmer who increased the price of apples in response to increasing demand, resulting in higher profits. It also discusses how decreasing price can increase demand. Equilibrium is reached at the point where the supply and demand curves intersect.

1. By Flavio Alves 13I

2.  When businesses are considering the price of their products
and services, they will sometimes go and look at Supply and
Demand.
 Supply looks at the price setting point, from the view of the
business.
 Demand looks at the same process, but from the
consumer/customer’s views.

3. What is it?
 Definition – Supply is the amount of goods that
producers are willing to supply or sell at a given price.

4. What is it?
 Definition – Demand is an amount that an individual
or individuals are willing to buy at a given price.

5. What is it?
 Equilibrium is when the Demand and Supply are
equal.

6. Price ($)
4
3.5
3
2.5
2
1.5
1
0.5
0
0
10
20
30
40
50
Quantity Supplied
60
70
80
90

7. Now, by what you see here, the quantity that is being
supplied is raising, therefore meaning that the price is also
raising, because the demand is increasing.
Price ($)
4
3.5
3
2.5
2
1.5
1
0.5
0
0
10
20
30
40
50
60
Quantity Supplied
70
80 90

8. Here’s an example. A farmer has gone to the market to sell the apples he
picked from his apple tree.
Because demand for
the farmer’s apples
were increasing,
The farmer decided
to increase the price
for his apples, which
means that he will
gain more profit.
Price ($)
4
3.5
3
2.5
2
1.5
1
0.5
0
0
10
20
30
40
50
60
Quantity Supplied
70
80 90

9. Now, for every 9 apples that were sold approximately, the prices of the
apples were 50 cents. Because the farmer realised how the demand was
increasing, he decided to raise the price for the apples. Below are the
results for how many apples were supplied at what prices.
It shows the demand
increasing, which is
what made the farmer
increase the apple price,
because he wanted to
make the most profit
possible.
Price ($)
4
3.5
3
2.5
2
1.5
1 -----------0.5 ----0
0
10
20
30
40
50
60
Quantity Supplied
70
80 90

10. Price ($)
4
3.5
3
2.5
2
1.5
1
0.5
0
0
10
20
30
40
50
Quantity Supplied
60
70
80
90

11. Now, by what you see here, the quantity that is being demanded is
increasing because the price is decreasing. This is because if the
price is lower, then more people will want to purchase the product.
Price ($)
4
3.5
3
2.5
2
1.5
1
0.5
0
0
10
20
30
40
50
60
Quantity Demanded
70
80 90

12. Here’s an example. In a primary school, they are selling Mars Bars at the
canteen for $4. Because the price is so high, only approximately 4 people
would buy them. Whereas if the price was lowered to 50 cents per Mars
Bar, approximately 90 people would buy them.
Price ($)
Because the demand
4
for Mars Bars were low 3.5
3
at the price of $4, then
2.5
the school had no
2
choice but to lower the 1.5
1
price of them, which
0.5
would then increase
0
the demand.
0
10 20 30 40 50 60 70 80
90
Quantity Demanded

13. Equilibrium is when both Supply and Demand curves intersect. The
equilibrium is in the middle, which is the amount that the sellers and/or
buyers are happy to pay/sell for the selected products.
Therefore, in this case
Price ($)
the amount demanded
4
3.5
at the price of approx.
Equilibrium
3
$2.20, would be
2.5
approximately 48,
2
1.5
because this is the
1
equilibrium point.
0.5
0
0
10
20
30
40
50
60
Quantity Demanded
70
80 90

14.  Lack of Raw Materials
 Input Price
 Communication
 Sub-Products
 Taxes and Subsidies
 Seasonality of Material

15.  Seasonality of Products
 Disposable Income
 State of Economy
 Competitors
 Demographic
 Price
 Complimentary Product