Consumer

Supply & Demand Textbook p 105-106 P 13

the people who use goods and services

The USA has a FREE ENTERPRISE or Market EconomyIn a free enterprise/market economy, the consumer helps decide what will be produced and what the price will be.

Competition the rivalry among businesses to sell goods to consumers and make the greatest profit.

Profit the money left over for the seller after the costs of

production have been paid.

If the supply is high, there will be less competition for the product – so it will be cheaper.

Think PENCILS at school

If the supply is low, the competition will be fierce, so the seller can boost up the price and people will pay if they really want it badly enough.

Think of the XBOX at Chrismas time last

year

SUPPLY HIGH = PRICE LOW

SUPPLY LOW = PRICE HIGH

DEMAND

Demand is the amount of people who want an item.

Think answer keys

to a test

If lots and lots of people want something (demand is high) then the price goes up.

If no one wants the item (demand is low) then the price goes down.

Think cleaner for computer

screen

Demand High = Price High

Demand Low = Price Low