Changes

No company can afford to build cars (supply them) if the sales price is only $1.  But at a sales price of $30,000, a vast number of cars can be built.  '''''The cause is price, and the effect is quantity.'''''

No company can afford to build cars (supply them) if the sales price is only $1.  But at a sales price of $30,000, a vast number of cars can be built.  '''''The cause is price, and the effect is quantity.'''''

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 of only millions sold.  At a still higher price of $100,000, the demand falls much further to the range of only a few thousand that can be sold.

The demand for a good is also described in terms of price and quantity.  At a given price, there is a specific quantity in demand by the public for the good.  A billion people might buy a car if the price were only $1 (unrealistic).  At a much higher price of $30,000, the demand drops to a quantity of only millions sold (realistic).  At a still higher price of $100,000, the demand falls much further to the range of only a few thousand that can be sold (these are the very luxurious cars, like a Lamborghini sports car).

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 tradition by economists, '''''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.  Put another way, the graph is of "Ps and Qs," in that order from left to right (P on the y-axis to the left, and Q on the x-axis to the 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 tradition by economists, '''''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.  Put another way, the graph is of "Ps and Qs," in that order from left to right (P on the y-axis to the left, and Q on the x-axis to the right).