Saturday, May 05, 2007

Suppy and Demand

This is a picture of supply and demand curves. Supply and demand are two terms talked about in economics a great deal.

"Demand" refers to how much of a product do people want to buy. As you can see, the horizontal axis (the line with "quantity" under it) tells how much of some product people want to buy. The vertical axis (the line with "price" above it) tells what the price of the product is.
If the price is very high, people buy less of the product, but if it is cheap, people buy lots of it.

"Supply" refers to how much of a product the people selling it want to make. When the price of some product is high, people selling want to sell as much as they can of it, so there is a lot of the product supplied. But if the price is cheap, people do not want to sell that product, so the there is less supply of the product.

On the graph, there is a place where the two curves meet. That is called equilibrium. It is the price of the product where the sellers want to sell the same amount of the product as the buyers want to buy. It is generally the best price for the product.


Danny said...

Wow ... I studied that graph exactly the same graph the last year ...
its nice ... and easy people should know what that means ...

I didn't know that you talk about everything in this blog ..
and you seem a smart girl(s) ..
you are interested in everything .. just like me .. and I like that ..
sorry because I'm not commenting on any posts ... but I'm very busy this month ..
cya ..

Homemanager said...

For someone who wanted to change their blog name to "The Non-Thinker", there seems to be quite a bit of thinking going on, on here! :-)