alicia moritz dante ruffalo rocky March 23


alicia moritz dante ruffalo rocky

Professor Doodles explains basic economics

The abstruse argot of economists like Mr. Bernanke and Ms. Yellen can quickly deter the interest of a lay audience.  However, all the sophisticated and difficult to comprehend language always comes back to one simple principle- the laws of supply and demand.

Supply and demand is an economic model of price determination that theoretically results in economic equilibrium where price and quantity demanded by consumers equals that afforded by suppliers.

Prof. Doodles would like to explain it this way:

When the iphone 5 came out, it cost $400 at the Apple store and there was a limited number each store could sell.  But because everyone loves iphones the ‘demand’ for iphone 5 exceeded the number of iphone 5’s stores could sell.

Therefore, some people’s mom and dad were willing to pay more than $400 to get the new iphone 5.  When people want to buy more iphones than Apple can manufacture, the price will go up.  This is because demand is greater than supply. Eventually the price will be so high, people won’t feel it is worth it to buy the new iphone and that is when ‘economic equilibrium’ has been reached.