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Hi there! Today we are going to explore how buyers and sellers work together in a market. You will see how prices go up and down like a see-saw!
Have you ever wondered why some things cost a lot of money while other things are very cheap? It all comes down to two big ideas: supply and demand. Supply is how much of something is available, and demand is how much people want it.
When the supply of an item is very low, but a lot of people want to buy it, the price goes up. Think of a rare toy that everyone wants for the holidays. Since the demand is high and the supply is low, sellers can charge more money.
What happens when there is too much of something? If a store has a huge supply of oranges but nobody wants to buy them, the demand is low. To get rid of the extra oranges, the store will lower the price to tempt buyers.
To plan a good story or essay about this, we have to think about our audience and purpose. We want to explain supply and demand clearly to a classmate. We do this by choosing a real-world topic they care about, like video games.
Let's plan and outline a short explanation about why a new game console is so expensive right after it is released. We want to teach a friend about this using our supply and demand rules.
- First, we choose our topic (new game consoles), our purpose (to explain), and our audience (a classmate).
- Next, we look at the supply. The factory can only make a few thousand consoles in the first week, so the supply is low.
- Then, we look at the demand. Millions of kids want the console for the holidays, so the demand is high.
- Finally, we connect the ideas. Because supply is low and demand is high, the price goes up. Sellers know people will pay extra to get one early.
