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Supply and Demand - Coggle Diagram
Supply and Demand
Demand-
Meaning of Demand
Demand is the amount of a product consumers are willing and able to buy at different prices.
It depends on price and consumer willingness.
Price and Quantity Demanded
When price goes up → quantity demanded goes down
When price goes down → quantity demanded goes up
This is called the Law of Demand.
Demand Curve
Shown on a graph.
Price on the vertical axis, quantity on the horizontal axis.
Slopes downwards from left to right.
Used to show how demand changes as price changes.
Real-World Examples of Demand
Concert tickets: higher prices = fewer tickets sold.
Takeaway food: lower prices = more people buying.
Related Goods-
(How products affect each other)
Substitute Goods
Goods that can replace each other.
If the price of one rises, demand for the other increases.
Examples:
Tea and coffee
Butter and margarine
Complementary Goods
Goods that are used together.
If demand for one increases, demand for the other also increases.
Examples:
Phones and phone chargers
Printers and ink cartridges
Effect on Demand
Substitutes and complements can cause the demand curve to shift.
Shows how products are connected in the market.
Supply-
(The seller’s side of the market)
Meaning of Supply
Supply is the amount of a product producers are willing to sell at different prices.
It focuses on producers and businesses, not consumers.
Supply vs Demand
Demand = buyers
Supply = sellers
Supply Curve
Slopes upwards from left to right.
Higher prices encourage producers to supply more.
Market Equilibrium-
(Where supply and demand meet)
Equilibrium
The point where supply equals demand.
Shown where the supply curve and demand curve intersect.
Gives:
Equilibrium price
Equilibrium quantity
Changes in Supply or Demand
Increase in demand → higher price and quantity.
Decrease in demand → lower price and quantity.
Increase in supply → lower prices.
Decrease in supply → higher prices.
Real-World Market Examples
Fuel prices rising when supply is limited.
Sports jerseys increasing in price after a big win.