Supply and Demand
Supply is the amount of a product
that businesses are able to offer for sale. Usually, the higher the
price, the greater the amount supplied. Demand for a product is
the amount of it that people buy. Usually, if there are high prices not many
want the item (low demand). What works best is when producers sell the same
amount that everyone wants. Then supply equals demand and everyone is
happy. That is called equilibrium price. But if
a lot of people want a certain item and there is a limited supply of that item, the price skyrockets. But, then, if nobody wants a certain item, there is plenty of it and the price drops. That
is how the law of supply and demand works.
O'Hara, Terence. The Economy. Chelsea House Publishers, Philadelphia: 2002.
Aaron, Henry J.. "Supply and Demand." World Book Online Reference Center. 2004. World Book, Inc. <http://www.worldbookonline.com/wb/Article?id=ar540420.> (February, 2004).
Images of baseball player from "Microsoft Office Online" <http://office.microsoft.com/clipart/default.aspx?cag=1> Images free for non-profit and personal use. (October-February, 2003-2004).
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