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Describe the role of buyers and sellers in determining the equilibrium price


external image Basic_supply_demand.png

Focus Question: How do buyers and sellers determine the equilibrium price?


  • The image to the right shows a supply and demand curve. The point at which the red and blue lines cross is the equilibrium price.

Topics on the Page

  • Equilibrium Price
    • Consumer Boycotts and Buycotts
    • The Greensboro Sit-In
  • Interactive Learning Activities and Lesson Plans

Equilibrium Price


Equilibrium price: when the amount of supply equals the amount in demand.
  • Essentially this means that supply and demand helps determine the equilibrium price.
  • When supply exceeds demand, sellers have to lower their prices in an attempt to get buyers to purchase.
  • When demand is greater than the supply, the buyers make the price go up because they are competing to buy the same goods.
  • Factors such as the cost of production, consumption habits, and restrictive practices and monopolies help influence the equilibrium price.
    • For example, if the buyer's consumption habit changes and they begin buying more of a certain product, there will be more of a demand for it.
  • To maintain an equilibrium price, the supply would have to rise as well. If the supply did not rise, then sellers would raise the price of their goods, throwing off the equilibrium price.

Multimedia.pngHere is a link to a Youtube tutorial on Equilibrium Price.
Video from Khan Academy which discusses Market Equilibrium.

For more refer to Standards E.2.7 and E.2.8

Consumer Boycotts and Buycotts


Buycotts

external image Bill_King_and_Patricia_Stephens-Boycott_and_picketing_of_downtown_stores_Tallahassee%2C_Florida.jpg
Buycotting is a form of consumer power where people engage in an active campaign to buy the products or services of a particular company or country. It is an attempt to let political, moral, or ethical considerations factor into demand for a product.

Why Buycotts Could Overtake Boycotts among Consumer Activists


Boycotts

TIME Article about the Woolworth Sit Ins during the Civil Rights Movement which can work to give context to discussing boycotts.


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Grad Your Wallet is an online list of retailers than carry Trump products, support Trump policies or services that stream National Rifle Association programming.

Interactive Learning Activities and Lesson Plans


game_icon.svg.pngClick here to play a fun supply and demand game from Schmoop.

  • Click here for a description of a classroom game that teaches students about supply, demand and the equilibrium price.
Multimedia.pngMore activities, graphs, and information on equilibrium price from Schmoop.

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  • NOVA Lesson Plan: Mind Over Money explores the new science of behavioral economics.


  • Pit Market Lesson Plans: Trading in a Pit Market Charles A. Holt gives a good explanation of how to set up a market in your classroom, from Journal of Economic Perspectives, 10 (1), Winter 1996, 193-203. This page also has links to a number of other classroom activity papers by Holt.
ecedweb.unomaha.edu/entrepreneur/lesson5.pdf This lesson from the Economic Education Web at the University of Nebraska, is based on Holt's article.

Sources:
1. Equilibrium Price. Accessed April 16th, 2008. http://encarta.msn.com/encnet/refpages/search.aspx?q=equilibrium+price
2. Supply and Demand. Accessed April 17th, 2008. http://encarta.msn.com/encyclopedia_761551825/Supply_and_Demand.html