UNDERSTANDING ECONOMICS SUPPLY AND DEMAND Marcia Amidon Lusted Britannica Educational Publishing IN ASSOCIATION WITH ROSEN EDUCATIONAL SERVICES
It’s a few days before Valentine’s Day Stores burst with heartshaped heartshaped boxes of candy and fancy Valentine’s cards Florists make hundreds of bouquets of flowers They know that consumers consumers are going to want to buy these items now However they also know that on the day after Valentine’s Day almost no one will want them They are hoping to sell as many of the items as possible before the holiday ends Meanwhile shoppers are also buying things like television television sets crayons and new coffee makers They might be looking for these items in January or July and they expect that they can find them any time of year Businesses know this so they try to keep these types of items available at all times These are two examples of what is known in economics economics as supply and demand Demand is how much of a product or service buyers want Supply is how much of a product or service the market which includes manufacturers manufacturers and stores can offer Sometimes demand is based on a holiday like Valentine's Valentine’s Day or a certain time of year For instance the demand for air conditioners will be much higher in summer This is an example of seasonal demand which only lasts for a short time Goods in seasonal demand are popular during a specific specific time Demand for those goods isn’t nearly as high outside outside of that seasonal period Demand for products that consumers want all year long is not based on a holiday or specific period of time unlike 4 INTRODUCTION
Seasonal items like this fancy candy for Valentine’s Day are only in demand at a specific time of year seasonal demand Supply and demand for these types of products fluctuates or changes all the time depending on a variety of factors like fashion trends or the popularity of a new item A product or service might be in high demand but have a limited supply At other times there might be a big supply of a good or service but little demand for it Economies exist because people have needs and wants These needs and wants are satisfied when goods are produced and sold In poor countries people can’t afford even basic necessities like food and clothing In wealthy 5
