Supply and Demand

 

What is Economics 101?

It is basic economics that would be taught to first year college students...  hence the 101.

Economics 101 is all about supply and demand that deals with companies supplying goods into the marketplace and consumers buying those goods or demanding that companies supply other goods into the market place.

For example, if a company wants to sell one pencil into a marketplace of lets say 1000 consumers, the price for that pencil would be high.  On the other hand, if that same company supplied 1000 pencils into that same marketplace, the price would reduce accordingly.

Another example.  Let's say the consumers wanted to buy a certain brand of coffee and the company supplying coffee refuse to supply that brand.  The consumer would be forced to look for another company because their demand was not being met.

Supply and Demand.

When the demand is up and the supply is low, the price increases.  

When the demand is up and the supply is high, the price decreases.

When the demand is up and the price is high, the supplier is typically forced to increase supply and lower the price or loose the customer.

When the demand is low, the supplier might lower the price to increase the demand or reduce the supply.

In other words:

• high supply low price
• low supply high price
• high demand high price
• low demand low price