Supply and Demand, commodities

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Supply and Demand

  • Demand - the amount that consumers are willing and are able to buy at any given price.
  • Supply - the amount sellers are willing to offer for sales of any given price.

Supply graph analysis

  • The higher the price, the more a business will be happy  to supply
  • As price rises the quantity supply increases.
  • The supply line only goes upwards in a diagonal shape.

Demand graph analysis

  • As price falls demand increases.
  • Demand always go downwards in a diagonal shape.

Shortage  

  • When there is demand for a product, which is greater than supply.
  • When a surplus exists, prices will tend to fall.

Equilibrium point 

  •  where the supply and demand for a product cross
  • when a business is willing to buy…

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