Changes

The demand for a good is also described in terms of price and quantity.  At a given price, there is an amount of demand by the public for the good.  A billion people might buy a car if the price were only $1.  At a much higher price of $30,000, the demand drops to a quantity in the millions range.  At a still higher price of $100,000, the demand falls much further to the thousands range.

The demand for a good is also described in terms of price and quantity.  At a given price, there is an amount of demand by the public for the good.  A billion people might buy a car if the price were only $1.  At a much higher price of $30,000, the demand drops to a quantity in the millions range.  At a still higher price of $100,000, the demand falls much further to the thousands range.

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!)   

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 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.