12.2.2. Discuss the effects of changes in supply and/ or demand on the relative scarcity, price, and quantity of particular products.
In order to understand the effects of supply and demand, you first need to know what they are. Supply is the amount of goods that are available, and demand refers to the measure of how much of a certain item is wanted. I am going to tell you how the law of Supply and Demand drives our economy on how it effects the changes between them. I am also going to discuss how supply and demand affects our daily lives, and learn a bit on how to you can save and spend your money. Supply and Demand are the driven force of our economy, if demand increases, the price rises, and if supply increases, the prices fall. An example of demand is, “ The demand for a specific toy, can get really high at Christmas time.” Another example could be, “ During Valentines Day, there is a high demand for roses.” An example of supply is, “ Say there is corn normally than what people would buy, and in order to get rid of it the prices have to lower for everyone.”
Supply and Demand can affect our daily lives, especially with prices, they change all the time making it hard to decide on what to buy. Some changes could be from a store having a sale, or gas prices going up. No matter the changes, there is always a way to monitor your money by saving or even making some. Learning the ways of supply and demand can be hard, but there are simple things to save some money. For example, I love shopping, but prices on clothes can get really high, and one way to spend my money well is by buying things on “Opposite Season.” If I buy summer clothes during winter I have the advantage of the decreased demand,and same goes with the opposite season. This chart below shows the supply and demand for cookies.
When we then plot and draw both curves together we are able to see the market price of the product.
The market price for cookies in this graph is 30 cents. The quantity sold and bought is 1100 cookies.