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| The study of how goods and services are produced and distributed. |
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| This occurs when an item is “scarce” or the supply is limited. The price goes up because many people want to buy it. How much would you pay for a ticket to see a sold out concert to see your favorite band. |
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| Companies use incentives or special deals, to get us to buy products. |
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Definition
| This is the American economic system. People are allowed to make personal economic decisions. Another name for this system is CAPITALISM . Everyone is allowed to own private property |
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| Consumers determine supply by their demand for goods. When the demand goes down, supply goes down. |
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| What happens to the price of items when demand is high? Products can set a high price because people will pay it. |
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Definition
Products can set a high price because people will pay it.
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| What happens if demand goes up but the supply is low? |
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Definition
| Gasoline is a good example |
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| What happens when demand is low and supply is high? |
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Definition
| When only one producer provides a good or service. This gives them to much power to set high prices. |
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| If consumers really need the goods or service, they will be forced to pay the high price because it is the only price. |
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