1. Price is on the left of the graph and shows increasing prices from bottom to top
2. Quantity is on the bottom of the graph and show increases from left to right
3. "D" represents demand and shows that as the quantity increases the price decreases
4. "S" represents supply and shows that as the quantity increase so too does the price
QUESTION: Why does Supply act like this?
ANSWER: Because inventory costs increase as more units are produced...
5. If demand increases "D1" and supply does not, then prices automatically increase because there is a perceived shortage
6. If demand increases "D1" and supply increases "S1" then prices drop back down to the previous level and could possibly go lower
NOTE: When #6 happens we have economic growth which is good for a society
THEREFORE; the purpose of MARKETING is to encourage the general public to BUY in the hopes that this will create economic growth... and this works as long as supply increases its quantity which it usually does...
HOWEVER... Americans are not always intellectually sound when it comes to making good financial decisions and oftentimes buy STUFF that they do not really need. Marketing does not give a damn if families go into debt... all they care about is selling products and increasing their quarterly commissions.
All those clever TV commercials that many people hate to watch and have typically started to record shows so that they can fast forward past the commercials are to get you to BUY... BUY... BUY...
The more one buys the greater the likelihood that you will not have the money to pay for your purchase so you will have to borrow that money from the bank or from a credit card company. The credit card company makes its money on INTEREST that you pay for that money... and, the longer it takes you to pay it off, the more money the credit card company generates in PROFITS at your expense... simply because you were convinced that you had to have something that you really did not need.
WHO'S THE STUPID ONE HERE?
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