Changes

Because supply and demand can both be expressed in terms of price and quantity, they can be plotted on the same graph.  In a confusing convention, the y-axis is typically price, and the x-axis is usually quantity.  (In most other graphs the cause is placed on the x-axis and the effect is on the y-axis, but you will find that economists often seem to have things backwards!)  Just memorize this rule and stick with it:  price is on the y-axis, and quantity is on the x-axis.  This might help you remember:  "p" for price is lower in the alphabet than "q" for quantity, and "p" appears first on the graph as one reads from left to right.

Because supply and demand can both be expressed in terms of price and quantity, they can be plotted on the same graph.  In a confusing convention, the y-axis is typically price, and the x-axis is usually quantity.  (In most other graphs the cause is placed on the x-axis and the effect is on the y-axis, but you will find that economists often seem to have things backwards!)  Just memorize this rule and stick with it:  price is on the y-axis, and quantity is on the x-axis.  This might help you remember:  "p" for price is lower in the alphabet than "q" for quantity, and "p" appears first on the graph as one reads from left to right.

The supply curve is usually upward sloping: the higher the sales price, the higher the quantity that companies can produce for sale.  That is because higher sales prices bring in greater revenue to fund the production costs.

The supply curve is '''''upward sloping''''': '''the higher the sales price, the higher the quantity that companies will produce for sale'''.  That is because higher sales prices bring in greater revenue -- and greater profits -- to fund the costs of making the good or providing service.

The supply and demand is the most basic relationship in all of economics.  It usually looks like this:<ref>The graphs here use Wikipedia open source images.</ref>

 

The supply and demand is the most basic relationship in all of economics.  It usually looks like this:

[[Image:Supply_and_demand.gif]]

[[Image:Supply_and_demand.gif]]