The demand curve demonstrates how much of a good people are willing to buy at different prices. In this video, we shed light on why people go crazy on Black Friday and, using the demand curve for oil, show how people respond to changes in price.
The supply curve shows how much of a good suppliers are willing to supply at different prices. For instance, oil suppliers in Alaska and Saudi Arabia face different costs of extraction, affecting the price at which they are willing to supply oil.
WATCH the videos below. dor a more in-depth understanding of Supply and Demand Curves.
Use horizontal and vertical methods for reading the demand curve, how demand curves shift, and consumer surplus.
WATCH the video below,
An increase in demand means an increase in the quantity demanded at every price. Similarly, a decrease in demand means a decrease in the quantity demanded at every price.
WATCH the video below to see real-world examples of some important demand shifters, such as changes in income (both for normal and inferior goods), population, tastes, the price of related goods (both for substitutes and complements), and expectations.
What does the supply curve show us?
WATCH the video below to see what we can tell from the supply curve about the behavior of sellers and quantities supplied at different prices. We’ll talk about producer surplus as well as factors that lead to an increase in supply and a decrease in supply — and we’ll provide a list of these important supply shifters.
What factors shift the supply curve? WATCH the video below.
You learned about equilibrium in the adjustment process, showing that the equilibrium price is the only stable price. WATCH this video to take a look at equilibrium quantity, where quantity demanded is equal to quantity supplied, and how this plays out in a free market economy that seeks to maximize gains from trade.
Nobel Prize winner Vernon Smith conducted experiments testing this model and found that time and time again, the model did indeed work. WATCH this video to learn about Smith’s evidence and his analysis of instances where market conditions shift either the demand or supply curve, and the equilibrium model comes into play.
