Advanced Placement Microeconomics analyzing individual economic decision-making.
The forces of supply and demand determine prices and quantities in competitive markets. Demand reflects how much consumers are willing to buy at different prices, while supply shows how much producers are willing to sell.
The intersection of supply and demand curves sets the market equilibrium price and quantity. If the price is above equilibrium, there's a surplus; if below, a shortage.
Smartphones become cheaper as more companies enter the market, increasing supply.
Holiday toys can sell out quickly if demand is much higher than expected.
Markets balance supply and demand to set prices and quantities.