If we talk about an actual quantity, we should say the quantity demanded.

If we lower the price of a product, that will raise the quantity demanded of that product.

I'd rather have than just getting more of this thing right over here

And I had this captured market. You didn't need contracts.

Now you can see some of the reasons why I'm optimistic.

And so, for any given price point, the demand would increase.

Let me write that in green.

Scenario E, I raise it to 10.

And then more people buy.

So it's now at 4 and then that kills off a lot of the demand.

And then our short run aggregate supply might look something like this, aggregate supply in the short run.

Or another way to think of it is, is this entire demand curve.

The price varies with demand.

We could charge 4.50 for the book.

I should say how price relates to quantity demanded, and how quantity demanded relates to price.

The supply demand balance is tight.

They decide to sell their house.

WRlTING Demand goes up.

There is more people that have money in their pockets.

Even the new Jack 2 field in the gulf of Mexico would only supply a few months of domestic demand.

So in that case, even though the money supply is huge, or a lot larger than it was, people aren't expressing demand.

This guy needs less cash, so it lowers demand.

And so essentially, it will shift, it will change the entire demand curve.

So, income goes up, then that increases demand.

This is the total numbers of cupcakes all of the factories in the market can produce.

This column let me put my price.

And so if income goes up for this laptop, the demand will increase.

When we hold everything else equal, we're moving along a given demand curve.

So this is where that moderate of inflation, really shows up.

So I'm going to let you think about that a little bit.

Prices depend on supply and demand.

And anytime there is less of something, that creates a price rise.

Here is the demand forecast for 1998.

Imported cars are in strong demand.

All the movements stopped at falsifying.

Well for the price of anything to increase, what has to happen?

So income goes down, demand goes up.

So we'll put price in the vertical axis and we'll put quantity demanded in the horizontal axis.

When everything else is equal and you're only changing price, you're not changing demand.

The demand was brought down by increases in imports.

Doesn't seem to be much demand for humans.

And in those cupcake economics videos, I showed that if the demand is pushing up against capacity.

So, it would shift the demand curve to the right or it would increase demand.

Supply is relative to demand.

The price reflects the demand.