Demand and supply are two concepts in economics that are basically essential yet sometimes confusing. This presentation explains these two concepts and how they affect the pricing of goods and services. If you want to customize this presentation, you can download the templates from this page: https://slideshop.com/Themed-Slides

1. SUPPLYDEMAND
ECONOMIC CONCEPTS

2. Demand and supply
are two basic
economic concepts
that primarily affect
pricing and
production.

3. Quantity of a good or
service that is desired
by buyers
DEMANDQuantity of a good or
service that the market
can offer
SUPPLY

4. Demand is determined by
Income
Tastes and preferences
Prices of related goods and services
Consumers' expectations about future
prices and incomes that can be checked
Number of potential consumers
Source: Wikipedia

5. Supply is determined by:
Production costs (primarily labor, capital,
energy, technology, and materials)
Firms' expectations about future prices
Number of suppliers
Source: Wikipedia

6. a
b
c
P3
P2
P1
Q1 Q2 Q3
Price($)
Quantity
Demand (D)
Law of demand
The higher the price,
the lower the demand.
At point A, the
number of goods
demanded is Q1 for
P3 price.

7. S
At point A, the
number of goods
that should be
supplied is Q1 for P1
price.
Law of Supply
The higher the price,
the higher the supply.
P3
P2
P1
Q1 Q2 Q3
Price($)
Quantity
Supply (S)
a
b
c

8. P3
P2
P1
Q1 Q2 Q3
Price($)
Quantity
Supply (S)
1
2
3
P3
P2
P1
Q1 Q2 Q3
Price($)
Quantity
Demand (D)
Just remember the slope’s direction.Confusing?
Law of demand : Downward
Law of demand : Upward

9. Supply (S)
Demand (D)
When the supplied and demanded
goods are equal, there is equilibrium.
But here’s the catch:
Equilibrium only
exists in theories. It’s
hardly attainable
due to constant
fluctuations in
supply and demand.
Equilibrium
1
2
3
4
5
6
0 1 2 3 4 5 6

10. When the supplied and demanded goods are
not equal, there is disequilibrium.
In case of surplus or
shortage, the point
of equilibrium has to
be adjusted.
Supply (S)Demand (D)
1
2
3
4
5
6
0 10 20 30 40 50 60
Equilibrium
Surplus
Shortage

11. Let’s take a look at how these concepts
are practically applied in real life.

12. Why has the price of
oil plunged in 2014 ?
Because oil supply was much higher than
demand by 2014.
North American companies started drilling for
new, hard-to-extract crude. Further, demand
for oil decreased due to new efficiency
measures and weakening economies.
Read more on Vox

13. Why is music cheap
these days?
Because the number of consumers who
are willing to pay for music has decreased.
These days, songs can be readily (and
freely) supplied through the Internet
download, file sharing, and other forms
of technology.
Read more on Bloomberg

14. Beef supply in the USA declined to
3.6% due to low domestic
production and tight global supply.
As a result, price of ground beef,
steaks and roasts got pricier.
Why is beef expensive
in the USA in 2015 ?
Read more on Bloomberg

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