Download Demand and Supply

Name _____________________________________________________ Block ________ Date ________
Demand and Supply Curves at Brooks
AP Micro
DEMAND
Step 1: Select a product or service that students at Brooks
would be interested in buying. What is it?
Step 2: Determine five possible prices for your product (zero can be a possible price). Place your five price points from
lowest to highest.
Step 3: Poll your classmates: would they buy your product/service for price 1? Price 2? Etc. Record how many
individuals will buy the product/service at each price point.
Note: one good way to poll your classmates is to start with your highest price. If the student says yes, you can assume
he or she would buy the product at all lower prices.
Step 4: Record your results in the table below
Quantity Demanded (X Axis)
Price (Y Axis)
Step 5: Draw your graph and plot your five data points. Connect your data points. Quantity goes on x axis, and price goes
on the y axis. Label your curve (or line) with a D for demand.
Step 6: Voila! You have a demand curve! How realistic do you think your curve is? How might the class’ data set compare
to the general population? (Look up average price if you can.)
Step 7: A few questions:
1. How could you increase the demand of your product, without making any changes to the product itself?
2. Is your product or service a normal or inferior good? Explain.
3. What substitutes could threaten the market for your product or service? Does your product or service have a
compliment?
4. Can you see consumers’ preferences changing in the future? How so?
SUPPLY
Step 1: Select a product or service that students at Brooks would be interested in (and capable of) providing. Keep it
clean, please. What is it?
Step 2: Determine five possible prices for your product (zero can be a possible price). Place your five price points from
lowest to highest.
Step 3: Poll your classmates: would they provide this product/service for price 1? Price 2? Etc. Record how many
individuals will supply the product/service at each price point.
Note: one good way to poll your classmates is to start with your highest price. If the student says yes, you can assume
he or she would supply the product at all lower prices.
Step 4: Record your results in the table below
Quantity Supplied (X Axis)
Price (Y Axis)
Step 5: On the same graph you drew from Step 5 on the reverse of this paper, graph these five data points. Connect the
dots and label your curve or line with an S for supply.
Step 6: Voila! You have a supply curve! How realistic do you think your curve is? How might the class’ data set compare
to the general population? (Look up average price if you can)
Step 7: A few more questions:
5. What might cause an increase in supply of your product or service, without making any changes to the product
or service itself?
6. What was the runner-up when you were choosing what good or service to produce? If it became more attractive
to produce the runner-up, what do you think would happen to your willingness to supply your chosen good?
7. If many more suppliers got into the same business as you, what would happen to the supply curve?
8. Based on the intersection of supply and demand on your graph, what market price would you expect to emerge
for the product or service?
9. To what extent does your answer from #7 match what you suspect the market price would be (if you were able
to do internet research, etc.)?
10. Without doing research on the cost of getting into this new business, do you think your business would succeed?
Explain why or why not.