Demand and Supply

DEMAND

Think of demand as:
“How many people WANT this thing… and how much are they willing to pay for it?”

Key Points

• When price goes UP → demand goes DOWN
  (No one is paying ₦10k for bread abeg 😭)

• When price goes DOWN → demand goes UP
  (Discounts turn everyone into a customer — even people that don’t need it.)

Determinants of Demand (aka what affects demand)

1. Price of the good

2. Income of consumers (more money = more buying)

3. Taste & preferences (trends can finish you)

4. Price of related goods

   • Substitutes (e.g., Pepsi vs Coke)

   • Complements (e.g., bread & butter)

5. Expectations of future prices

6. Population size

SUPPLY

Supply is basically:
“How much producers are willing and able to sell at a certain price.”

Key Points

• When price goes UP → supply goes UP
  (Sellers love money — they increase production)

• When price goes DOWN → supply goes DOWN
  (No profit, no motivation.)

Determinants of Supply

1. Cost of production

2. Technology (tech = easier production)

3. Price of the good

4. Government policies (taxes, subsidies)

5. Expectations about future prices

6. Number of producers

DEMAND & SUPPLY CURVES

• Demand curve: slopes downward ↘️

• Supply curve: slopes upward ↗️

Where they meet = Equilibrium Price
That’s the “everybody calm down” point — buyers and sellers are both satisfied.