Introduction to Supply and Demand for Kids and Teens
This video explains the concept of supply and demand in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about supply and demand, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
What is supply?
Supply is a key concept in economics describing how much of a product or service is available to consumers.
Using the example of a car, supply would refer to how many cars are available for sale at a given time.
If many units of a particular car are for sale, then its supply is high. If the car is rare and isn’t sold in large quantities, then the supply is low.
What is demand?
Demand is another key concept in economics describing the amount of a product or service that people are willing to buy. It’s the market’s demand for a product.
Using the same example as earlier, if many people want to buy a certain car, then its demand is high. But if only a few people want to buy that car, then its demand is low.
How are supply and demand related?
Supply and demand are the driving factors that decide prices in a free market economy. Depending on how much supply and demand there is for a certain product, the price will change.
Generally, if supply is more than demand, the price will go down and if demand is more than supply, the price will go up.
For example, the demand for roses increases on special occasions like Valentine’s Day or Mother’s Day, and the price of roses increases significantly at that time.
Similarly, after the holidays the demand for holiday decorations reduces drastically, so they are available at a deep discount.
Why are supply and demand important?
Whether you are an investor, entrepreneur or just a consumer, understanding supply and demand is important because they influence the price of everything – groceries, gas, toys, entertainment, travel, and more.
Low supply or high demand makes prices go up, and high supply or low demand makes prices go down.