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social 9 project

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social 9 project
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  • this drink costs 6 dollars because 6 dollars is the ballance between the supply and demand marginswe sell 60 drinks a day at 6$
  • wow this is an expensive drink at 6 dollars i wonder why it costs so much? what is supply and demand?
  • if the supply is 80 drinks and we sell 60 then the demand is 60 and supply is 80. if we sell more drinks for less, like 120, for 3$ then the demand is less but the supply is more so the stress of selling everything is greater but we can also sell more because more people can afford it
  • Oh, I see. and so if you sell 50 drinks for 10$ you can make more money but not many people will buy it because its overpriced. is the supply is limited then the demand will be greater but if the price is to much then you wont make any profit so finding the balance between the supply and setting the price while still ensuring that the demand is as high as you can is the key to getting profit?
  • Exactly, finding the balance for the price and the demand and the supply is the key. This is called economic equilibrium (supply and demand are balanced)
  • Supply can also be affected by the producer like farmers if they have a bad season then the price will raise because the supply is limited and thus raising the demand
  • Oh! thank you i understand why this drink is so expensive now thanks
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