Supply & Demand
Supply & Demand Overview
In a Nutshell
One curve to rule them all!
Well, two really, if you want to get technical about things. The supply curve and demand curve are two of the simplest, yet most powerful tools to help economists understand and explain the world. Bring them together into one graph of supply and demand and you have the key weapon in every economist's arsenal.
If you really understand the concepts of supply and demand and how to use them, you're going to do just fine in your econ class.
And if you haven't quite wrapped your mind around supply and demand yet, well, let's get cracking. You'll be plotting out equilibrium prices like a pro in no time.
Why Should I Care?
Why did that bottle of refreshing Coke cost you $1.50 rather than 50 cents... or $5? Supply and demand.
Why are you making $8 an hour at your job rather than $50? Supply and demand.
Why did Hummer seem poised to take over the automotive world in 2001 but go out of business half a dozen years later? Supply and demand.
Long story short: if you want to understand what's going on out there in the economic world -- which is to say, if you want to understand what's going on out there in the world, period -- a solid working grasp of supply and demand is absolutely indispensable.
Why should you care about supply and demand? If you don't, you're going to be living in a world of hurt.